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Can I get the feed-in tariff and a grant?

Posted by Cathy Debenham on 7 July 2010 at 12:15 pm

Community groups and schools that received Low Carbon Building Programme (LCBP) phase 2 grants have been told that if they want to receive the feed-in tariff they will have to pay the grant back.  As many of them went ahead and installed in the belief that they would be entitled to the feed-in tariffs, this is a huge blow, and there are lots of worried people about. They also don't know what they will be paid for electricity they generate or export if they choose not to pay the grant back.

A phone call to the Department of Energy and Climate Change (DECC) has clarified matters a bit:

State aid rules

The uncertainty arises because of the European Commission's State Aid rules. The aim of this control is to ensure that government interventions don't distort competition and trade inside the EU. The feed-in tariff has been passed as complying with the rules, but what's not clear is whether the feed-in tariff plus an additional grant complies. The decision has been passed from DECC officials to "the minister" to make, and until he does, the charities, community organisations, schools and other public sector bodies which received LCBP phase 2 grants will remain in an uncomfortabe stat of limbo. Once the decision is made it will be posted on the DECC website.

So what does it mean for me?

If you got a domestic LCBP grant to install solar panels, a wind turbine, or micro hydro, and installed on or after 15 July 2009 then you are eligible for the feed-in tariff at the full rate for your size of installation, and can keep the grant.

If you got a domestic LCBP grant to install prior to July 2009, then you get the early adopters rate of feed-in tariff, and keep the grant.

Organisations that received LCBP phase 2 grants must wait and see. Keep an eye on the DECC website (and this site) for updates.

Farmers hoping to benefit from the EU's Agricultural Fund for Rural Development which is offering grants from £10,000 to £60,000, or up to 40% of the cost of installing a wind turbine, should also wait, and keep an eye on the DECC website  for the State Aid decision.

Photo by Colin Gregory Palmer

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Comments

14 comments - read them below or add one

Between the Green

Between the GreenComment left on: 20 September 2010 at 3:44 pm

By the way, Utility Warehouse still haven't confirmed they will give me a FIT agreement. Maybe I should switch to nPower?!?!

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Mark Brown

Mark BrownComment left on: 31 August 2010 at 1:28 pm

It looks as if this will hopefully be my last post on this specific matter as I have received the good news today that NPower have decided to accept me into their FiT Scheme. Today's letter (dated 26th August - see note below from "Between the Green" dated 25th August) from NPower states that they have received "confirmation from Ofgem" but they don't elaborate upon the wording of this confirmation and it isn't public. However, in short, I can keep my LCBP1 grant & now qualify for the FiT too. Much as we expected all along as the loophole was but a technicality afterall....

The DECC web page here has been updated but remains vague. It still says that "generators who were previously expected to be ineligible for both FITs and grants e.g. under the Low Carbon Buildings Programme (LCBP) may now be eligible." (my emphasis). I suspect their website hasn't been updated. Of interest is a later section where DECC now admit that they intend to update the "The Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010". Although a UK Statutory Instrument passed by Parliament it was the 'error' in this document that lead to the confusion in the first place. DECC continue to maintain that they have been awaiting the EU Commision statement on whether UK FiTs breach law on state aid. In fact that judgement was reached months ago when the 'all clear' was given subject to a marvellously obscure statement that "Recipients of publicly funded grants for a plant will be eligible for the FIT scheme for that plant without having to repay the moneys received if they are in compliance with the EU’s rules on de minimis aid". It was only the last few words about "de minimis aid" that proved the sticking point. All of which seems to obscure that fact that it never looked like the problem need have arisen in the first place. It is probably unlikely that we will ever know if DECC made an error in the Order or just miscommunicated the meaning of the Order. For the hundreds so effected this will now be semantics. We are just glad it is finally sorted.

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Cathy Debenham

Cathy DebenhamComment left on: 31 August 2010 at 1:20 pm

Great news from Mark and Between the Green. I'm glad it's been sorted out. I've talked to Ofgem about the nuances of the de minimis rule, and you can read about it here.

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Between the Green

Between the GreenComment left on: 25 August 2010 at 12:03 pm

Good news this morning from my electricity supplier, Utility Warehouse. They have heard from DECC that the FIT rules will be changed, so  that domestic users who commissioned solar panels after 1 April 2010 can keep their LCBP grant and still be eligible for the FIT.

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Between the Green

Between the GreenComment left on: 19 August 2010 at 10:24 am

Hi,

I am in the same position as Mark Brown. We were awarded a LCBP grant in December, but because of delays in inverter supply, the solar array was not commissioned until May.

When I applied to Utility Warehouse (my supplier) for a FIT, I was told that I was not eligible until I repaid the grant. They quoted OFGEM guidance which seemed pretty clear that, if commissioning was after 31 March 2010, the grant had to be repaid. But my solar panel supplier was extremely surprised to hear this and suggested I joined YouGen for help!

I'm encouraged to hear that DECC are looking at the situation again and there might be a chance of the policy being changed. Would it help if we (everyone affected) wrote to DECC to put our case?

Let's hope we get our money!

Robin.

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Cathy Debenham

Cathy DebenhamComment left on: 19 August 2010 at 9:52 am

I'm sure that it's worth writing both to DECC and your MP. The more letters they get, they realise it's a problem. And do keep us informed of any answers you get - helpful or otherwise.

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Mark Brown

Mark BrownComment left on: 3 August 2010 at 3:40 pm

Further feedback from www.fitariffs.co.uk (ownergy) who have now agreed that the loop hole exists: "it is clear that - whether intentional or not - for eligible installations commissioned after 31st March 2010, an LCBP grant is not explicitly permitted. We do agree that this may have been an unintended consequence of the FITs Order wording and therefore may be open to revision from the Authorities."

They go onto say that they didn't believe many installations would have fallen into my situation. NPower actually claimed they had many customers falling foul of this problem. I do appear to be the first and only person to have raised this issue in a public fashion. We still await DECC's decision with interest. It is intriguing that the crew over at FITariffs.co.uk were unaware of the issue before I raised it and also suggested that it had been "an unintended consequence of the FITs Order wording". This aligns them with our growing conclusion that it was a minor gaff as DECC had not intended LCBP to overlap with FIT hence had not worded the Order correctly. They have covered their tracks quite well as they appear to have pulled their previous advice off the internet.

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Mark Brown

Mark BrownComment left on: 29 July 2010 at 12:36 pm

An interesting update today: I put the question about the LCBP Grant "limbo" to the people behind /www.fitariffs.co.uk (ownergy) and I got this reply:

"We don't actually see any limbo regards grants and the situation was always clear - LCBP2 grants would need repaying, LCBP1 grants do not."

This viewpont clearly is not true. It remains clear that not even the experts have their eye on the ball. The original DECC advice was misleading and I really wish more in the industry would wake up to the howling gaff that was unleashed with LCBP1 Grants & the FiT. DECC have withdrawn all their advice and are back at square one again. IT ISN'T RESOLVED. The DECC website link remains stubbornly unchanged. They still haven't cleared up the limbo. So we still wait and see....

In the meantime - be careful whose advice you seek.

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Sara

SaraComment left on: 20 July 2010 at 11:29 am

Hi, We are a student group (from a Spanish University) that is doing research work about the small wind turbines in the European market and we are interested in knowing more about the experiences of the owners of small wind turbines. If someone is interested on helping us, we will be very grateful, because is a important work for us. We will be contactable by email: sara4857@gmail.com Thank you.

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Mark Brown

Mark BrownComment left on: 12 July 2010 at 9:18 am

NPowers response has been interesting. Indeed - I don't think anyone saw this coming! I enclose a section of the E:Mail that NPower sent me on Friday as this might make things more explicit for us (I had sent them the advice direct from Ofgem and DECC):

I believe that the quote from Ofgem is from a letter dated 19th March in relation to the transfer of customers accredited under the Renewable Obligation (RO) to the Feed in Tariff. I believe that this does not apply in your case. As your system was installed on the 9th April 2010, you will not have been accredited under the RO as this formally ended on 31st March 2010.

With regard to the information from DECC, we understand statement from which you are quoting may be misleading. The statement refers to installations on or after 15th July 2010, however, the Statutory Instrument which takes precedent refers to installations on or after 15th July to 31st March 2010.

The Order states that grants are not permitted, however provides two exemptions, namely:

In this article, "permitted grant" means

(a) a grant made before 1st April 2010 in respect of costs of an eligible installation which was commissioned before 15th July 2009; or

(b) a grant made before 1st April 2010 in respect of costs of an eligible installation on a residential property which was commissioned between 15th July 2009 and 31st March 2010.

The DECC website currently states following State Aid clearance from the EU, they will be issuing further guidance on the relationship between Feed in Tariff's and grants.

The current situation is frustrating to both us and our customers. We hope that this guidance will allow us to register you.

_______________________

I must say at this point that I am grateful to NPower and I hope that they can sort this out. NPower are telling us that DECC's advice has been "misleading" (their words!). THIS problem effects every household who were awarded a LCBP from around December 2009 (in my case) to the point it was scrapped. Given the 3 to 4 month leadtime in installations (due to the lack of availability of equipment or planning applications) some of these householders will have found their Solar Panels going up after 1st April. In my case we commissioned ours on the 9th April. If we had been lucky enough to had our installation commissioned just 10 days earlier (back in March as we would have liked) then none of this would have happened.

I have written back to NPower suggesting that, if their interpretation is correct, that DECC have been niaive. They should have sought guidance on the matter months ago. In effect they allowed the LCBP Grants to be awarded long after they knew this would be a problem. Or didn't they see this coming? The LCBP grants should have been scrapped back in November 2010, or the end date for payments should have been March 31st 2010. This shouldn't have been allowed to happen... A bit of a shambles..

Check the link.

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npower

npowerComment left on: 9 July 2010 at 2:24 pm

Hi Mark Brown, Firstly, I'm sorry to see that you're frustrated with this situation. There are very clear rules within the Statutory Instrument that introduced Feed in Tariff's with regards to eligibility in cases where customers have received grants. The Order states that any systems installed on a residential property after the 1st April 2010, which has received a grant, is not eligible to claim Feed in Tariff's unless the grant has been repaid. However, we understand that it was not the intention of the Department of Energy and Climate Change (DECC) to prevent residential customers from benefiting from the Feed in Tariff. Following State Aid clearance from the EU, DECC will be issuing further guidance to electricity suppliers on how we are to treat customers who have received grants. We expect that this guidance will allow us to register customers in this situation. In the meantime, we have kept all applications from affected customers "active" and as soon as we have received guidance from DECC, we'll advise customers accordingly. We'll also ensure that customers are not disadvantaged by ensuring they're compensated under the Feed in Tariff from the original date of application. I hope this clears up any concerns. Thanks Alan npower

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Cathy Debenham

Cathy DebenhamComment left on: 9 July 2010 at 10:25 am

This letter was received by a community group that find themselves in this position:

Thank you for your email dated 9  June about the eligibility of your community microgeneration system for  Feed-In Tariffs (FITs)  given your receipt of a grant form the LCBP2  scheme. I apologise for the delay in responding to you.

Eligibility  for FITs is defined through the Feed-in Tariffs (Specified Maximum Capacity  and Functions) Order 2010 and the associated electricity Supply Licence  modifications which were made by the Secretary of State for Energy and  Climate Change on 31 March 2010.

The scheme generally prohibits  recipients of grants from receiving FITs as such recipients would be  receiving a double benefit.  However, it allows a combination of grants  and FITs payments in some limited circumstances, including where making  those payments would be in accordance with State Aid laws.

The  European Commission has responsibility to consider and decide whether or not  proposed State Aid is compatible with the single market.  As such, the  Commission has been considering the GB FITs scheme and published its  decision on 11 June 2010.

Following the publication of that decision,  we are reviewing the implications on scheme eligibility and will provide  further guidance as soon as possible.

I hope this is  helpful.

DECC  Correspondence Unit

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Cathy Debenham

Cathy DebenhamComment left on: 9 July 2010 at 9:42 am

It's bizarre. I also had one of the last grants - installation in February - and have had no problem. My guess is that the person you spoke to was getting confused with the situation with LCBP phase 2 grants for charities, community organisations and the public sector, where there is uncertainty. I'd try ringing again, and hope you get another person. I've asked my twitter followers if any of them have experienced the same problem and will report back...

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Mark Brown

Mark BrownComment left on: 7 July 2010 at 3:53 pm

I have a problem with NPower at the moment who are refusing to register me for the FiT because I received one of the very last LCBP grants for PV this year. I phoned them to point out that I don't need to pay anything back as mine was a domestic install. They agreed but claimed they needed to clarify this with DECC and Ofgem - despite both web sites being explicit on this point. This was five weeks ago and I still await NPower's correction - so far nothing. Any advice? Do we agree that NPower is "trying it on"? If so, why? What do they have to gain?

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