In our e-update of 5 August, Community Renewable Schemes: A Grant or FITs - But Not Both? we undertook to update you on guidance to be issued by the Department for Energy and Climate Change (DECC) when it was published.

The DECC has now published its views on whether or not grants and Feed-in Tariffs (FITs) can be claimed at the same time without falling foul of State Aid rules, and we are pleased to say that the news appears to be slightly more positive, at least for some community renewables projects.

While reiterating that it is generally not possible for a generator to benefit from both FITs and a grant from a public body, the DECC sets out three situations in which OFGEM may accredit for FITs an installation which has also received a grant from a public body. In summary, those exemptions are:

Permitted grants

Permitted grants are those made before 1st April 2010 in respect of the costs of an eligible installation commissioned before 15th July 2009, or an eligible installation on a residential property commissioned between 15th July 2009 and 31st March 2010.

De minimis public funding

Recipients of publicly funded grants who comply with the EU's rules on de minimis aid. To be de minimis, public funding, including funding from FITs, must not exceed €200,000 (currently approximately £160,000) over a period of three years in most cases.

Non-standardised costs

Non-standardised costs are additional costs incurred as a result of measures taken to reduce the environmental impact of an installation.

On the whole, this can be seen as positive news for communities contemplating renewables projects and which are receiving or hoping to receive grant aid, but who are also relying, or hoping to rely, on FITs to make the project attractive to lenders.

For larger community projects where financials are currently dependent on both FITS and grants which are unrelated to environmental impact measures that have not yet been made, and where de minimis levels may be exceeded, further advice may be advisable.