The solar industry has experienced further recent upheaval as the Government is again reviewing the support it gives for renewable projects from the Renewables Obligation Scheme. The initial intention was that there would be a gradual transition for renewable projects to new Contracts for Difference up until March 2017.
However, at the start of this month the Department for Energy and Climate Change announced that it would be unaffordable to keep the RO Scheme open for large solar projects (i.e. greater than 5MW) and so it would be closed to new projects from 1 April 2015. DECC is offering a concession by the introduction of a “grace period” in order to acknowledge projects where significant financial commitments have been made subject to them having been incurred prior to 13 May 2014. To take the benefit of such grace periods, projects must have :
- A grid connection offer and acceptance;
- Confirmation of land ownership (including an option to purchase); and
- A planning application submitted (which cannot be materially varied);
before 13 May 2014. Even then, those projects would then need to be commissioned and accredited prior to 31 March 2016 to qualify for the RO Scheme.
The consultation is ongoing and so at this stage there is uncertainty as to how the “grace periods” will be interpreted. For this blog, we just want to consider the planning aspects and discuss what might represent a ‘material’ variation from an original application.
Of course, it is not uncommon for non-material amendments (under Section 96A of the Town and Country Planning Act) to be made on large solar applications and if DECC follows the planning regime, then such changes would not be considered as material variations.
The difficulty that might arise is if the changes are regarded as ‘minor material’ and so an application under Section 73 is required. Of course, whilst the planning regime consider these changes to be material, they are not sufficiently material as to require a new planning application and so it will be interesting to see what interpretation is made by DECC.
Practice Note – these “grace periods” mean that investors need to be even more careful in the planning due diligence that they do on solar projects as it is not always apparent when planning amendments have been made – some LPAs will put the applications separately on their websites rather than linking them to the main consents.