Solar companies chase DECC for £2.2 million in damages

Following the dramatic Supreme Court victory earlier this year, three separate solar companies have approached the Department of Energy and Climate Change (DECC) to request compensation for losses incurred as a result of the ruling, which found proposed cuts to the FiT in October last year as ‘unlawful and unfair.’

The solar companies claim that the cuts enacted by Government directly caused substantial damage to their respective businesses. The organisations argue that they saw consumer confidence collapse, a reduction in orders, the loss of a number of substantial contracts; and sales and profit margins shrink as a result of the unlawful cuts.  

One of the companies seeking compensation is Burnley-based solar installer, Solarlec. Nick Keighley, the company’s Founding Director, said: “Unfortunately, the losses incurred as a result of the feed-in tariff cuts are very real. Solarlec has had an incredibly tough eight months, making redundancies and cutting costs wherever possible. We are keeping our business moving, but the reality is that we suffered substantial damage.”

Keighly added: “Only this week DECC revealed solar as the UK’s most wanted renewable energy source, 83 percent of the public calling for more. Today we’re respectfully asking that the department acknowledges its unlawful behaviour and rectifies the damage caused to the industry. We can then put this behind us and get moving to create the solar future the public wants.”

The two other companies involved in the claim wish to remain anonymous for commercial reasons, in the hope that the claim does not escalate to the High Court. The solar companies’ compensation claims have been meticulously researched, using forensic accounting to accurately estimate the losses incurred.

The compensation claims being brought against the department are being spearheaded by Prospect Law, the same legal team who successfully challenged DECC over retrospective changes to the feed-in tariff.

A spokesperson from Prospect Law commented: “The 2008 Energy Act and the feed-in tariff effectively provide a set of rules for delivering the UK’s clean energy future. The way in which DECC administered this positive framework for solar PV created a ‘legitimate expectation’ under which both the public and industry could operate. But the premature and unlawful cuts, announced by the Minister on October 31 last year, ignored Government’s own policy framework.”

He continued: “By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry. Solar is a robust industry, and one the public wants, but significant damage has been done to the sector. We urge the Government to act responsibly, face up to its unlawful conduct and the damage this caused and to offer compensation.”

A DECC spokesperson told Solar Power Portal: “We can confirm we have received a letter before action on FiTs and we are considering its content.”

The department has been given a fortnight to respond to the claims. If the case does end up in the High Court, it could set precedent for other solar installers in the UK to claim compensation.