Last Wednesday the Department of Energy and Climate Change (DECC) announced that it would remove pre-accreditation for the feed-in-tariff with effect from 1st October. Pre-accreditation allows solar PV and wind projects above 50kW and all hydro and anaerobic digestion projects to lock into a tariff once the project has planning permission and a grid connection (and, for hydro installations, environmental permits). DECC said it received nearly 2,400 responses to an accelerated four-week consultation on its proposals, the vast majority of which opposed the changes (in fact only 16 respondents backed the plans).
Pre-registration, a type of pre-accreditation which is currently available to community groups and schools with solar PV installations not exceeding 50kW, will also be removed from 1st October. It was acknowledged in the consultation that there would be a particular impact on the community sector (indeed it would have been hard not to given that it was only in April 2015 that the pre-registration period was extended by six months to reflect the extra time required for a community organisation to raise finance for renewable electricity projects).
The proposals on pre-accreditation were published as an emergency measure in July, prior to a wider review of the feed-in-tariff announced late last month. That wider review, whilst expected, has dismayed the industry with proposed reductions in the levels of support from January 2016 far in excess of those anticipated. These range from an 87% reduction in the level for domestic scale solar to a 25-30% reduction for hydro schemes whilst simultaneously introducing an accelerated pace of quarterly depression that could see the FiT end altogether for some technologies by 2019.
History suggests that the sudden cuts will result in a short term accelerated deployment, with developers rushing to take advantage of the higher tariffs before they are cut in the new year. Unfortunately for community schemes such accelerated deployment is made all the more difficult by the need to raise funds from community investors against a backdrop of accelerated cuts and in this regard the loss of pre-registration is particularly damaging.
DECC has stated that if it can reduce expenditure on feed-in-tariffs to between £75m and £100m from 2016 to 2018/19, then it would ‘consider’ reinstating pre-accreditation for some technologies. The prospect of any such reinstatement however seems remote given the current government’s approach to the industry.
Any developer or community group that has an eligible project that is not pre-accredited or pre-registered for the feed-in-tariff has until 1 October to do so.