On 7 September 2012, DECC launched its consultation on proposals for the levels of banded support for solar PV under the RO for the period 1 April 2013 to 31 March 2017.

Background

The consultation on the RO Banding Review ("ROBR") published in October 2011, proposed that support for solar PV under the ROC scheme would remain at 2 ROCs/MWh until March 2015, reducing to 1.9 ROCs/MWh for new accreditations added between 1 April 2015 - 31 March 2016 and 1.8 ROCs/MWh between 1 April 2016 - 31 March 2017. However, since then, DECC suggest that the costs of deploying medium and large scale solar have fallen significantly and DECC feel that it is no longer appropriate to continue to support solar at these levels as doing so is likely to result in substantial over-payments. DECC are therefore consulting on a lower rate of support for new solar PV under the RO.

DECC do not propose changing its current policy of grandfathering solar PV installations. The RO support levels for existing and accredited generating stations will not change.

Key points of the consultation

The key proposals within the consultation are as follows:

  • To set the following RO support levels for solar PV:

Please click here to view table.

These support levels are stated to be equivalent to the tariff under the FIT Scheme for solar PV between 250kW-5MW. There will be no capacity bandings under the RO and as such, the proposed level of support will be the same for any eligible solar PV installation of any capacity. DECC are still contemplating issuing a further consultation which will seek to prohibit new solar PV installations of 5MW and below from being eligible for the RO.  

  • Cost-control – DECC proposes to use the existing mechanics for early review under the RO to try and ‘ensure that support levels for solar PV within the RO remain sustainable’. DECC intends to closely monitor the industry, reviewing evidence on industry costs, levels of actual deployment compared with predicted levels and any significant divergence between the FIT and RO support levels. If their findings lead them to consider that the legal criteria for a review are met, DECC will hold an early review. DECC anticipate that such changes would follow the normal RO cycle (i.e. from the start of an obligation year on 1 April) however they have not ruled out that changes may be made within the year where there is evidence that a more urgent change is needed. The changes to the support levels are supposed to be in line with the tariffs under the FIT Scheme but this will not always be aligned where there are different cost-control mechanisms in place.

In general the consultation is a little brief and in some places confusing as to exactly what changes DECC are proposing. Clearly any projects with longer lead times would need to have sufficient notice of any reduction in the RO support level to enable commitment from funders and developers alike. We would urge those affected to respond to the consultation. The closing date for responses to the consultation is 19 October 2012.

To read the full consultation, please click here.