Energy Minister Greg Barker has defended the Government’s legal move to appeal to the Supreme Court over the Feed-in Tariff fiasco.
The MP said the Department for Energy and Climate Change was forced to act on the assumption it would save an additional £1.5 billion being spent on the FiTs programme.
In a written answer to Green Party MP Caroline Lucas yesterday, Barker explained how DECC had calculated the added cost to the consumer if no legal action was taken.
In his letter, published this morning, he wrote: “We respectfully disagree with the decision of the Court of Appeal, and intend to seek to appeal to the Supreme Court against the ruling.
“However, if we had chosen not to do so, there would have been much greater costs to consumers both due to installations between 12 December 2011 and 3 March 2012 receiving higher tariffs (of 43.3p/kWh for installations up to 4 kW of installed capacity) for 25 years, and because of a likely increase in installation rate due to continued availability of the higher tariffs.
“It is very difficult to estimate by how much the installation rate might have increased, since this involves assumptions about demand for PV at the higher tariffs and the ability of the market to respond to that.
“We based our estimate on the observed increase in installation rate in the six weeks between the launch of the consultation on tariffs for solar PV on 31 October and the proposed reference date of 12 December, which saw 292 MW (over 74,000 installations) more PV installed than in the previous six week period.
“Conservatively, we assumed that there might be an additional 200 MW installed in February and March if the higher tariffs had remained available. Assuming the deployment was split between tariff bands in a similar ratio as earlier deployment (with around 75% of <50 kW capacity being in the 0-4 kW band), this would have led to additional costs to consumers of approximately £100 million per annum, or £1.5 billion in real, discounted terms over the tariff lifetime.”