News that 17 solar companies are chasing the Department of Energy and Climate Change (DECC) for £140 million worth of damages has polarised opinion in the UK solar industry.
Currently, a poll being conducted on the Solar Power Portal homepage is showing a 50/50 split in support of legal action. Amidst the backdrop of concerned voices in the solar industry, Simon Gillett Chief Executive of E-Tricity, one of the named claimants, explained to Solar Power Portal why his company is taking DECC back to the High Court.
Why are you bringing forward a damages claim against DECC?
Someone has acted illegally – if you take away DECC and the solar angle – if someone has acted illegally, normally there is some form of recompense. I don’t believe, and the other claimants don’t believe, that DECC is above the law. As proven in multiple courts, DECC has done something illegally and from that there is some form of compensation because people have suffered losses as a result.
What effect did the feed-in-tariff changes have on E-Tricity?
We lost significant orders. We were running a very large programme of 50kW farm-scale solar at the time. The farmers that were looking at the scheme were fuel impoverished individuals with no on-grid connection to gas or access to cheap energy.
We had a programme to deliver 1,000 50kWp systems to help the farmers move themselves out of that fuel poverty and enable them to compete within the agricultural market in Europe that little bit better. What the announcement did was devastate that and 1,000 farmers became 80 farmers.
As a company we lost the installations, the profits and the ongoing relationships that the programme would have brought but more importantly there is a significant tranche of agricultural Britain that is staying in fuel poverty because of that action.
As a result of the changes did your company have to make redundancies?
We let go around 30-40% of our staff here. We’ve gone through that painful period making the painful decisions that everyone in industry had to make: Do we carry on? Do we fight to survive or do we close the doors? Many of our peers have done the latter but we’ve managed to battle through growing and going forward.
What would you say to members of the solar industry that are critical of your claim?
I would say that the government isn’t above this – if people act improperly they must be held to account. Having been proven to have acted illegally, we and the other claimants have decided to hold the department to account.
It is not to everyone’s liking but maybe they didn’t suffer the same losses that we did or as directly as we did due to that illegal action from DECC. Everyone is entitled to their own opinion and we’re not going to say people are wrong. We think that we are right in what we are doing; only time will tell if we are.
The fact that this is getting people talking is good. The fact that opinion is split 50/50 [in Solar Power Portal’s poll] shows that we’re neither right nor wrong.
We think we’re right and that any sensible industry would do the same – the oil industry wouldn’t stand by and let the government do it, nor would the gas and electricity industry allow government to ride roughshod over them in the way that the renewable energy world is now not allowing to happen.
We’re not just acting on a whim against DECC; this is about making sure DECC is held accountable for making an illegal decision and I’d advise anyone that it happens to in the future to follow suit.
Are you concerned about potential negative impacts on the industry from the damages claim?
I don’t think it will have a negative impact at all. If anything, it will have a positive impact because it shows that solar in the UK is a professional industry that isn’t prepared to be bullied or dictated to in an illegal manner by government.
If you don’t react the bully of the playground gets away with it until someone pushes back and says, “No, you can’t do that”.
The action taken previously [to challenge the FiT changes] shows that this is a professional body that is prepared to stand up and be counted when it’s required to. I think history will probably look back at this point and judge it as the right thing to do.
Why do you think that only 17 solar companies out of around 2,000 have decided to claim damages?
First, you have to make the decision whether you want to invest the time and money to go in to a claim, and there is always a gamble in any litigation. Secondly, there were those that didn’t suffer a substantial number of losses. There are a number of reasons why you wouldn’t and there are a number of reasons why you would. Every company has their own reasons.
We thought: Should we do it? Should we not do it? And on balance we decided that we wanted to do it. We want to make sure that this industry is a stable one that can grow, yet we saw investors pull out and run away from the UK because of that action. The action DECC took destabilised the market and caused pandemonium – that can’t be allowed to happen again.
How confident are you of being successful with the claim?
We’re confident because we have a professional company representing us, a balanced argument and we’re working from a basis of illegal action. However, with any litigation there is a risk associated.
Do you see the damages claim as the solar industry in the UK maturing and vigorously defending its corner?
I see it as a coming of age for the solar industry; no other energy industry would allow this to happen without standing up and fighting. This claim is saying just that: you can make decisions but follow due process. You know that we’re not going to like all those decisions but when due process is followed we’ll accept it. When due process is not followed, and that’s proven, then someone has to be held accountable for the damages.
What is your view on the current policy and the future of solar?
I’m really pleased to see Renewable Obligation rates and feed-in tariff rates being confirmed and we are now starting to see that rush of investment return to the UK solar market. It is that stability that we need to have. What we can’t do is allow that stability to be checked again in the future because of a rash decision by DECC.
As a business owner in this sector I’m really proud of solar in the UK and I think that 2013/2014 will be a very exciting growth period for us all. Let’s hope that this gives us the stability and confidence to bring that investment forward and continue to grow.