Dec. 15 (Bloomberg) -- A U.K. judge ordered a hearing next week on a High Court challenge to government cuts to solar subsidy rates, installers Solarcentury and HomeSun said.
The companies are challenging a government decision to lower rates by more than 50 percent before the end of a consultation period, according to statements today. The hearing is due to take place on Dec. 20.
“It is only the first step of the legal challenge”, John Faulks, Solarcentury’s company secretary, said in a statement. “The Court agrees that we have a case to argue and has given us permission to challenge DECC,” he said, referring to the Department of Energy and Climate Change.
The department started a consultation on feed-in tariffs, or guaranteed premiums for solar energy, on Oct. 31, in an attempt to reduce rates to reflect lower costs for panels and curtail a boom in installations. It decided that the cuts would apply to all projects completed after Dec 12., about fourth months earlier than scheduled.
“A cut of over 50 percent that occurred in just six weeks and before the end of a consultation period is cynical and irrational,” Faulks said.
Solarcentury and HomeSun were joined by Friends of the Earth, an environmental group, in the legal challenge. The opposition Labour Party has said the cuts could put 25,000 jobs at risk.
U.K. Energy Secretary Chris Huhne said the reductions are needed because the boom in installations means every week of delay leads to more than 25 million pounds a year in additional subsidies. The surge is threatening the 867 million-pound ($1.4 billion) budget allocated for feed-in tariffs through 2015, he said.
“To wait any longer will put the entire scheme at risk,” Huhne told ministers.
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