Government plans to cut financial incentives for solar electricity have created "huge economic uncertainty" and are "manifestly unlawful", the High Court was told today.

The accusations were made by environmental pressure group Friends of the Earth (FoE) and two solar companies, Solarcentury and HomeSun, as they jointly launched an application for a judicial review.

Key Points

  • Application for judicial review into solar cuts launches
  • Government proposing retrospectively to cut feed-in tariff
  • Friends of the Earth against the Government plans

They say Energy Secretary Chris Huhne is proposing "retrospectively" to cut feed-in tariff subsidies (FITs), payments made to households and communities that generate green electricity through solar panels, on any installations completed after 12 December this year.

FoE and the companies say the "premature and unlawful" December deadline fell 11 days before a consultation into feed-in tariffs ends and has already led to unfinished or planned projects being abandoned.

Sam Grodzinski QC, appearing for HomeSun Holdings Ltd, told Mr Justice Mitting at London's High Court: "This challenge is to action taken by the Government that has thrown the small-scale solar industry, as well as voluntary organisations and housing associations and other people who want to install solar panels, into a state of huge economic uncertainty and which is manifestly unlawful.

"The [Energy Secretary's] desire to curtail the FITs scheme as quickly as possible led him to act in a way both beyond the objects of the enabling legislation and unlawfully as a matter of basic common law fairness."

Government lawyers are arguing there is no legal basis for today's application for judicial review and its proposals are not "retrospective" in any meaningful sense.

FoE report

A recent report commissioned by FoE and an alliance of solar firms and consumer and environmental organisations known as "Cut Don't Kill" estimates the cuts could cost up to 29,000 jobs and lose the Treasury up to £230 million a year in tax income.

Construction firm Carillion has warned 4,500 workers their jobs are at risk.

Friends of the Earth's executive director Andy Atkins said before today's hearing: "The Government's rushed plans to slash solar subsidies have pulled the plug on countless clean energy schemes and threatened thousands of jobs. We believe this is not just unfair, it's unlawful."