Reform UK’s threat to tear up government support for wind and solar developers would fall foul of contract law, leading legal experts have said.
Richard Tice, the party's deputy leader, has told renewable energy developers that Reform would “reassess all net zero-related commitments” as a result of their “intolerable costs” to the economy.
His intervention is being viewed as an attempt to sabotage Energy Secretary Ed Miliband's next round of bids for support to build new wind and solar farms – known as Allocation Round 7 (AR7). It will offer developers “contracts for difference” (CfDs) giving them a guaranteed minimum price for their power for up to 20 years.
“If elected — or if we hold the balance of power — we will immediately reassess all net zero-related commitments,” Tice said in the letter he also posted on X on Wednesday.
“As a first step we will seek to strike down all contracts signed under AR7 (the upcoming subsidy auction). Should you choose to participate, you should treat any long-term revenue stream as politically and commercially unsafe.”
However, today Mr Tice is being warned that the Contracts for Difference (CfD) mechanism is legally binding, and "not a political indulgence".
Tara Singh of global brand reputation agency Burson, says CfDs are not subsidies, but private law contracts, signed with the Low Carbon Contracts Company (LCCC), a government-owned entity created to provide legal certainty.
“That distinction matters,” Ms Singh told Daily Business. “Unlike public subsidies, private law contracts can be enforced in court. If a future government tried to renege, developers could sue.
“The structure was a deliberate response to the chaos of the 2000s, when countries like Spain pulled renewables support overnight and shattered investor confidence. The UK chose a different path — and it worked."
She added: "Reform can of course change the rules for future auctions — but AR7 contracts signed today will be ironclad.”
Andrew Kirwan, managing director of Copper Beech Advisory, said: “The Contracts for Difference (CfD) mechanism is not a political indulgence. It is a legally binding, statutorily governed market framework that has delivered cleaner energy, lower wholesale prices, and greater investor certainty across more than a decade of deployment.
“If Reform UK intends to govern by threat, investors will respond by withdrawing capital, pausing projects, and reassessing the UK’s sovereign reliability.
Chris Hewett, the chief executive of trade body Solar Energy UK, called the threat “legally questionable” and said: “This letter will be ignored by any serious investor.”
Renewable UK executive director of policy Ana Musat added that “every recent opinion poll shows that the vast majority of people support the development of renewable energy".
Labour said Reform was “actively trying to discourage businesses from investing in clean energy in the UK” and accused the party of “disgracefully trying to undermine the UK’s national interest”.