Solar Power Portal has revealed details that several solar PV companies have approached the UK Department of Energy and Climate Change demanding compensation for losses incurred as a result of “illegal” feed-in tariff cuts last year. On behalf of these companies, their legal team Prospect Law has issued DECC with a ‘letter before claim’ requesting that over £2.2 million be paid in damages.

The UK’s High Court, Court of Appeal and Supreme Court’s ruling in favour of cuts to its FiT earlier this year led to “substantial damage to their businesses”, claims Prospect Law. The solar companies claim to have seen a drop in consumer confidence, reduction in orders, sales and profit margin as well as the loss of substantial contracts, including ‘free solar’ schemes, “virtually over night”.

Nick Keighley, founding director, Solarlec PV Solutions, one of the companies seeking damages, said, “Unfortunately, the losses incurred as a result of the feed-in tariff cuts are very real. Solarlec has had an incredibly tough eight months, making redundancies and cutting costs wherever possible. We are keeping our business moving, but the reality is that we suffered substantial damage. Only this week DECC revealed solar as the UK’s most wanted renewable energy source, 83% of the public calling for more. Today we’re respectfully asking that the department acknowledges its unlawful behaviour and rectifies the damage caused to the industry. We can then put this behind us and get moving to create the solar future the public wants.”

Solar Power Portal has confirmed that the two other companies involved wish to remain anonymous for commercial reasons. The publication states that "the solar companies’ compensation claims have been meticulously researched, using forensic accounting to accurately estimate the losses incurred."

A spokesperson from Prospect Law added, “The 2008 Energy Act and the feed-in tariff effectively provide a set of rules for delivering the UK’s clean energy future. The way in which DECC administered this positive framework for solar PV created a “legitimate expectation” under which both the public and industry could operate. But the premature and unlawful cuts, announced by the Minister on October 31 last year, ignored the Government’s own policy framework.”

He continued, “By casting aside the rules under which the solar industry operated, the Government caused major financial losses and materially harmed the confidence of both consumers and the industry. Solar is a robust industry, and one the public wants, but significant damage has been done to the sector. We urge the Government to act responsibly, face up to its unlawful conduct and the damage this caused and to offer compensation.”

A DECC spokesperson told PV-Tech that, “We can confirm we have received a letter before action on FiTs and we are considering its content.”

In May this year, the UK Solar Trade Association (STA) called for a delay to planned FiT cuts, which are effective August 1, in a bid to boost installed capacity figures. In a letter to DECC the association asked for the proposed cuts to be held off until figures pick up.

The Department of Energy and Climate Change has been given a fortnight to respond to the letter before claim; the organisations are hoping no further action will need to be taken.