Breaking News: FiT loophole is now closed

After weeks of silence the Department of Energy and Climate Change (DECC) has finally announced that the consultation on extensions to the large-scale feed-in tariff has ended and the loophole is now closed.

Energy and Climate Change Minister Greg Barker said, “We have read and carefully considered all responses to the consultation but I remain convinced of the need to take urgent action to close this technical loophole to ensure that money is protected for householders, small businesses and communities. The new rules on extensions will come into effect on 18th October 2011.”

While a number of companies had already taken advantage of the loophole by installing what they could in the timeframe left in the wake of the fast-track review, this news puts a final stop to all those hoping to achieve larger-scale solar installations under the higher feed-in tariff rates after the October 18 deadline.

However, DECC has made some adjustments to the proposal it consulted on based on the responses it received. These changes reflect concerns raised through the consultation process and are intended to provide maximum transparency and certainty to developers about how the new rules will be applied.

"Delays to accreditation may occur for a number of reasons, including because of normal processes, the need for operators to provide further information and/or backlogs in Ofgem’s and suppliers’ systems. Under the consultation proposal, the implication was that extensions could only be notified in relation to accredited installations, with no clarity on how extensions to installations pending accreditation in this scenario would be treated," outlined DECC's consultation response.

"Concerns were raised that, in the context of proposals to change the rules on extensions, this would create unnecessary additional uncertainty for developers as a result of factors over which they have little control. Therefore, in the interests of transparency and certainty, the changes to the FITs Order that are being introduced include a transitional provision which means that in the interim period before the FITs Order comes into force, the current rules on extensions will apply both:

(a) where an extension is made to an accredited installation and that extension is commissioned and notified to Ofgem before the commencement date of the amending Order; and

(b) where an extension is made to an eligible installation that has commissioned and has applied for accreditation (and is subsequently accredited), and that extension is commissioned and notified to Ofgem before the commencement date of the amending Order."

This change means that those developers who have tried to register and receive accreditation before extending, but have been frustrated by the Oofgem backlog, may still have a chance to benefit from the higher rates. 

Interestingly none of the trade associations, including the Renewable Energy Association (REA), Solar Trade association (STA) and British Photovoltaics Association (BPVA) responded during the consultation period.

Greg Barker will be speaking at the upcoming Solar Power UK Conference in Birmingham on October 27, where he will outline Government’s roadmap for a greener future.

DECC's full amended document can be viewed here.