DECC proposes changes for solar: FIT scheme and Renewables Obligation

Yesterday's concerns over a surprise announcement by DECC on the Feed in Tariff have come to fruition this morning with the publication of a consultation on removal of Feed in Tariff pre-accreditation and another on the closure of the Renewables Obligation to solar PV.

Feed in Tariff

In its short consultation on the Feed in Tariff, DECC summarises proposals to remove the pre-accreditation scheme, with the result that installations would receive the tariff rate as at the date they apply for full accreditation rather than at the pre-agreed level.  DECC considers that developers are now better placed to handle the inherent risks in the digression mechanism rationale and aim to limit the number of installations which deploy at the higher tariff levels so as to cut the cost to bill payers.

DECC will aim to publish their decisions as soon as possible after the consultation on the Feed in Tariff closes on 19 August 2015, and intends to carry out a full review of the Feed in Tariff scheme later in 2015.

Renewables Obligation

DECC has announced its proposals to:

• Bring forward the closure of the Renewables Obligation to new solar PV projects of 5MW and below across Great Britain from 2017 to 1 April 2016, applicable to new installations and to additional capacity added to existing accredited installations up to 5MW total installed capacity. DECC plans to offer grace periods provided certain criteria are met. 
• Remove the guaranteed level of subsidy for the duration of solar PV projects of 5MW and below in England and Wales that are not accredited under the Renewables Obligation as of today, 22 July 2015. 
• Launch a banding review for solar PV projects in England and Wales of 5MW and below to test whether the costs to developers associated with the deployment of solar PV have fallen further and faster than previously anticipated.

DECC will aim to publish their decisions as soon as possible after the consultation on the Renewables Obligation closes on 2 September 2015 and:

• Subject to Parliamentary approval, intends to implement any decision to close the Renewables Obligation early to solar PV projects of 5MW and below through legislation to come into force before 1 April 2016. 
• Subject to this consultation intends that the effective date for the removal of grandfathering will be 22 July 2015. 
• Subject to this consultation, will publish proposed bandings for new solar PV projects of 5MW and below for further consultation.

Please click here to view the full report.