Breaking News: DECC plans to close feed-in tariff loophole

A loophole in the Department of Energy and Climate Change (DECC) feed-in tariff policy documents is set to be closed as companies rush to take advantage of higher incentive rates.

The escape clause, which is only just beginning to gain publicity after being suppressed by DECC for some time, provides UK project developers with the opportunity to by-pass the effects of the fast-track feed-in tariff review.

Under sections 15 and 16 of the ‘Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010’ document, developers are able to install a system over the microgeneration amount before the August 1 deadline – thereby receiving the higher FiT rate – and then install an extended capacity within 12 months. Importantly, this extended amount would also benefit from the higher rate.

This loophole has been kept under wraps since its discovery, in order to prevent an anticipated rush of installations. Some companies are thought to have already taken advantage of this clause, by installing what they can in the timeframe left in the wake of the fast-track review, and then planning the remaining capacity post August 1.

DECC is now seeking to close the loophole, as it presents the same problem the Department was trying to quash in the first place.

A DECC spokesperson said, “We have become increasingly aware that a number of large-scale solar PV developers are positioning themselves to exploit a loophole in the FiTs extensions rules in order to bank the current tariffs beyond 1 August. We are concerned about this development and are considering taking action quickly.”

It is understood that should DECC chose to close the loophole completely, it would still have to go through the Government consultation process, which takes 28 days, as well as going through Parliament, which adds a further 21 days. This means that even with a closure there will be a 49-day extension to the August 1 deadline.

An anticipated 10-20 more large-scale systems could be completed in this timeframe.