The action was brought following the 2011 policy changes to the feed-in tariff subsidy regime.
The companies issued the claim in 2012, arguing that the government had damaged their business by changing the law. The group is seeking £132m in compensation from the Department of Energy & Climate Change (DECC) following the decision to retrospectively introduce early cuts to the feed-in tariff just as the fledgling industry was getting going. They claim it resulted in “chaotic trading conditions, shattered consumer confidence and thousands of redundancies”.
The Hon. Mr Justice Coulson, the High Court Judge on the case, said: “Although the entitlement to damages will ultimately depend on the facts, as a matter of general principle, the claimants have demonstrated an entitlement to damages assessed by reference to the loss of those possessions for which recovery is permissible, namely signed/concluded contracts and/or the marketable goodwill referable to such contracts.”
Nick Keighley of Solarlec, one of the claimants firms, said: “The good news is that small scale solar power generation is now on the road to recovery. The feed-in tariff is now stable and the costs of solar PV are slowly reducing, representing increasingly better value for consumers and a very cost-effective way of generating green energy. Public support for solar remains high and the government now want solar to play a big role in our energy mix. The fact is however that the industry was treated very badly by DECC, and their actions in 2011 damaged the growing industry and severely harmed the ability of companies such as ours in a key growth sector from investing, innovating and creating much-needed jobs as well as contributing the UK carbon reduction commitments.”
He added: “2012 and 2013 should have been years for continued growth, innovation, investment and training in the solar sector. Instead DECC’s conduct caused us two years of cut backs, customer confusion, part time working, stress and redundancies. Many in the industry had to let staff go in the weeks following Greg Barker’s announcement. We asked for compensation to be paid to us to help us get up to speed again and to help secure the clean and affordable energy supply we need. We’ve just about made it through and our focus is now on investing in a much diminished workforce and planning for the future. If the Government really does support solar, it needs to compensate businesses for the losses it caused and move forward with the industry.”
The average size of the claims is £6m with individual claims ranging in size from £250,000 to tens of millions of pounds. The exact damages awarded will be decided according to the value of contracts lost as a result of the government’s actions. This is to be confirmed in the coming months following a submission to the courts by law firm Prospect Law.
The organisations claiming damages include: Freetricity Plc, Ecovision, Solar Power PV Ltd, Solarlec, Crystal Windows & Doors, Breyer Group Plc, E-tricity, Foz Electrical, Viscount Solar Ltd, New Energy Solutions, Green Home Company, Evo Energy, Monitor My Solar, and Cleaner Air Solutions.