Tomorrow the Court of Appeal will decide whether it will grant a hearing for the Department of Energy and Climate Change (DECC), which holds fast in its opinion that it was necessary to cut solar feed-in tariff rates by up to 50 percent with a cut off date of December 12, 2011. Although the findings of a hearing – if granted – won’t be heard until next week, Friday the 13th could hold great significance for the future of the UK solar market.

If DECC loses

In the event that DECC loses the right to a hearing, the UK solar industry may find itself worse off than before the 21p proposal was announced.

The Judicial Review has shed light on DECC’s illegal actions, but has, at the same time raised the stakes, as a return to 43p/kWh tariff could see another rapid rise in deployment.

DECC is not ruling out any options should it lose the appeal, and it is possible that the FiT will be reduced to just 9p post April 1. The fact is, the ‘budget’ set aside for feed-in tariffs has already been blown, and therefore putting the tariff back until DECC can change it again could have catastrophic impact on future rates.

Under consultation rules, DECC must put legislation before Parliament for 40 days to allow for changes or amendments, meaning the earliest it could impose a new date for cutting incentives would be mid-February.

The Renewable Energy Association (REA) is particularly concerned about the possibility of a 9p tariff, as it states, “DECC came very close to this two months ago, but it was fought off by the Minister. The legal process may have implications as to whether this outcome might be avoided again.”

In this case DECC is likely to be inundated with calls for an increase in the ‘budget’.

Earlier this week, Friends of the Earth called on DECC ministers to immediately lay contingency legislation before parliament in case it loses the appeal in order to provide a glimpse into the future for the solar industry.

However, DECC says its hands are tied, and that it can’t reveal anything until the outcome of the appeal is known.

If it does lose, DECC may still appeal to the Supreme Court, a process for which it is difficult to forecast a timescale. The REA’s understanding is this is something of a test case around the consultation process on secondary legislation, which has far wider implications across the whole of Government and which therefore means there will be much wider considerations for Government in choosing to pursue this beyond the solar issue.

“This could mean that even if DECC wanted to drop the case, concern over the rulings impact on other Government policy may prevent them from doing so,” the Association said.

If DECC wins

If the appeal is granted and DECC wins, it intends to publish its response to the consultation on or around January 30 along with the Phase 2 Comprehensive review. However, the proposals in the Phase 2 consultation depend on what the result of the Judicial Review is and the amount of PV that has been installed since December 12.

Yet, regardless of the consultation outcome, if it wins the appeal DECC has promised:

“The tariff rate for PV installations less than or equal to 4kW will not fall below 21p for installations with an eligibility date between December 12, 2011 and March 31, 2012.”

No rates have been listed for installations above 4kW.

If DECC is granted a hearing tomorrow, the results will not be out until next week. So, as ever, only time will tell what lies ahead for the UK solar industry.