Exclusive: UK developers launch legal challenge over grandfathering removal

Five UK solar developers have launched legal proceedings against the Department of Energy and Climate Change (DECC) regarding the removal of grandfathering rights under the Renewables Obligation.

DECC was informed of the challenge in a letter issued by Asserson Law Office – representing the as yet unnamed claimants – on 3 November.

The letter, seen by Solar Power Portal, stresses that the developers consider the removal of grandfathering rights set out under consultation is unlawful due to it being retrospective in nature.

The parties consider it to be similar in nature to a previous ruling against the department made after cuts to the feed-in tariff made in 2011. A legal challenge issued by some 14 installers was successful earlier this year and will return to the High Court in early 2016 to determine an appropriate level of damages, which could be as high as £200 million.

Speaking to SPP Shimon Goldwater, associate at Asserson, said that the claimants had invested millions of pounds in particular projects that due to changes to grandfathering would now not be eligible for grace period funding, resulting in them becoming stranded assets.

“This decision is retrospective. It goes back in time… Retrospective legislation such as that is normally not allowed unless parliament very clearly says that it what it’s giving the minister permission to do.

“That is not the case here. The main criticism is that DECC is doing something which is unfair because it changes the rules retrospectively after people have invested money,” Goldwater added.

Goldwater could not however add any timeline to the proceedings, stating that this has yet to be agreed.

Changes to grandfathering rights were laid out under a consultation launched on 22 July but only confirmed today. The announcement is said to have been delayed in order to coincide with the results of the feed-in tariff consultation to form a complete reset of renewable subsidies.

The latest challenge adds to a host of legal problems DECC and other government departments are facing on the back of subsidy amendments. In October energy minister Andrea Leadsom confirmed that her department had received notice of legal action relating to proposed changes to the feed-in tariff, while HM Treasury is also facing a possible judicial review over its decision to make community energy projects exempt from receiving EIS, SEIS and SITR tax relief.

DECC had yet to respond to requests for comment on this article at the time of publication.