On 20 July 2012, DECC announced its response to the ‘Consultation on Comprehensive Review Phase 2B: Tariffs for non-PV technologies and scheme administration issues’. The key changes to the FIT Scheme stated in DECC’s response are as follows:
- New Tariffs for all technologies other than solar PV (“Other Technologies”): the new tariffs for all Other Technologies are found below and will apply to installations with an Eligibility Date on or after 1 December 2012. This is different to the proposal in the consultation which suggested the date of 1 October 2012. Please note that DECC stress the importance of the applicable tariffs being equivalent to the support that the technology would receive under the Renewables Obligation to avoid any preference over which scheme was chosen:
Please click here to view table.
- Degression: DECC have proposed that the degression model for Other Technologies (excluding micro-CHP) will be once a year in April, and will be calculated based on deployment in the previous calendar year. There is also a mechanism in place for 6-monthly degression in October if degression exceeds stated thresholds.
Preliminary Accreditation: this has previously not been permitted under the FIT Scheme, however, OFGEM will now administer a system of preliminary accreditation for all installations eligible for the ROO-FIT accreditation process (solar PV and wind greater than 50kW and all AD and hydro installations) as follows:
- Applicants will need to have evidence of 1) planning; 2) acceptance of a grid connection offer; and 3) for hydro installations, necessary environmental permits.
- Once accredited, installations eligible for preliminary accreditation will receive the tariff that they would have received if they had been accredited at the time that they applied for preliminary accreditation.
- Tariff guarantees will apply for a fixed period from the application for preliminary accreditation – 6 months for Solar PV , 1 year for AD and wind and 2 years for hydro.
- Energy efficiency requirements: DECC have confirmed that the energy efficiency requirements that apply to solar PV will not be introduced to apply to the Other Technologies at this point.
- Index Linking: DECC have confirmed that the current annual indexation in line with RPI will remain unchanged at this time.
- Export Tariff: further to the changes announced to solar PV technology, a new Export Tariff of 4.5p/kWh will apply to all Other Technologies with an Eligibility Date on or after 1 December 2012.
- Used Equipment: DECC has confirmed that no changes will be made to the treatment of used equipment, namely that equipment previously accredited under the FIT Scheme or Renewables Obligation will not be eligible for the FIT Scheme.
Definition of ‘Site’: DECC have stated that they are going to make amendments to the definition to ensure that:
- several installations, e.g. wind turbines or solar panels at a single location, are not treated as separate sites because they register separate MPANs;
- separate residential units on a private wire network (i.e. park homes) are treated as separate sites; and
- hydro installations that are physically separate are not treated as a single site because of DNO constraints that do not allow them separate connections.
- ‘Stand-alone’: DECC are proposing to amend the description of ‘stand-alone’ in the tariff so that it only applies to all installations which are not wired to provide electricity to a building. DECC are removing the other limb which was whether it was attached to a building.
- ‘Commissioned’: the definition of ‘Commissioned’ is going to be altered so that it is clear that installations must actually be operational.
- Sustainability: the consultation sought views on the sustainability requirements for both AD and hydro. DECC confirm that for AD, the Government will implement a voluntary Code of Practice in the first instance whilst DEFRA and industry monitor this issue.
Community projects: DECC have proposed to introduce the following changes to promote its support of community led schemes:
- DECC will define ‘Community Energy Projects’ based on tax legislation which would include: a community investment company, a co-operative society and a community benefit society. This definition will be restricted to small companies, such that those eligible can have no more than 50 employees.
- At this time to tariff will not be different, even though there will be a separate column for this group should differentiation of tariff become applicable in the future.
- These projects will be exempt from the energy efficiency requirements for solar PV on non-domestic buildings. This will also extend to schools and further education and sixth form colleges.
- Preliminary accreditation/tariff guarantees: DECC will extend tariff guarantees to ‘community energy projects’ on non-domestic properties with a declared net capacity of less than 50kW.
- ‘social housing’ – DECC have confirmed that the current multi-installation tariffs will also apply to social housing and such schemes will not be treated differently.
- FIT Licensees: the response to Phase 2A confirmed that the threshold for Mandatory FIT Licensees would change from 50,000 to 250,000 customers from 1 August 2012.
- Other administrative matters: many other matters are still being considered by DECC as part of a separate consultation which will continue over the summer.
DECC proposed to introduce the necessary changes after summer recess, which should all take effect from 1 December 2012, subject to Parliamentary approval and State Aid.
To read the full response, please click here.