Renewables Uncertainty

The renewables sector has been cast into uncertainty following the publication of two consultations on future policy by the Department for Energy and Climate Change.  The first (see https://www.gov.uk/government/consultations/changes-to-financial-support-for-solar-pv) proposes that the Renewables Obligation (RO) for solar PV projects under 5MW will close as from April 2016 (those over 5MW have been ineligible since April 2015).  In addition, ‘grandfathering’ rights (where additional capacity is supported at the same rate as existing accredited installations) will cease as from now.  This would leave feed-in Tariffs (FITs) as the only source of support for solar.  However, DECC has also pledged a thorough review of the whole FITs regime later in 2015.  The second consultation (see https://www.gov.uk/government/consultations/changes-to-feed-in-tariff-accreditation) looks at the accreditation regime under FITs.  At present ‘pre-accreditation’ makes it possible to lock into a fixed level of FITs whilst a grid connection, planning, and finance are sorted out and construction takes place.  The developer has six months for solar PV, 12 months for wind and anaerobic digestion and two years for hydro projects to begin generating.  It is proposed that this system will end – potentially greatly increasing the uncertainty in developing renewables projects with long timescales.  All these changes are in addition to the removal of support for onshore windfarms under the RO announced last month.