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Good news on grants and feed-in tariffs

Posted by Cathy Debenham on 1 September 2010 at 2:22 pm

Many schools and community groups are being told they can claim the feed-in tariff and keep grants received under the Low Carbon Building Programme, following months of uncertainty.

Under threat of having to pay back their grant many organisations faced financial difficulty. Their calculations prior to investing in wind turbines or solar PV panels had anticipated receipt of grant and the feed-in tariff. For those who had fundraised for years to get the project off the ground, the idea of more fundraising to pay back the grant was devastating.

So, after months in limbo, waiting for a ruling on EU law on state aid, last week's  announcement from DECC, has brought relief to many.

Whether you have to pay the grant back or not depends on the size of the installation and the size of the grant. If the projected total income from the grant plus the feed-in tariff comes to less than the 'de minimis' threshold of 200,000 euros in a three year period (which it will in most cases), then there is no need to pay back the grant.

  • People who were awarded LCBP grants for domestic installations that were commissioned after the 1 April 2010 are now eligible for the feed-in tariff under the de minimis rule.
  • Community projects, schools and other public sector organisations that received LCBP phase 2 grants will need to do some calculations. Add together the grant, plus the projected income from both export and generation tariff of the feed-in tariff over a three year period. If it comes to less than 200,000 euros, you're OK to keep the grant.
  • Farmers who were hoping to install renewable energy with a grant from the rural payment scheme and receive the feed-in tariff are out of luck, as the de minimis threshold for agriculture is set much lower at 7,500 euros.

Claiming the feed-in tariff is easy for installations under 50kW. You just need to make a declaration about your de minimis status to your feed-in tariff supplier (this is your electricity company).

If your installation was originally registered under the RO system, and you want to migrate to the feed-in tariff, you must inform Ofgem before the deadline of 1 October 2010.

The only group now left waiting to hear their fate under the feed-in tariff are the early adopters who installed their microgeneration before the cut off date of 15 July 2009, and receive a much lower rate of feed-in tariff as a result. Prior to the election the Conservatives promised to pay microgeneration pioneers the same rate as new installers, but have gone very quiet on the matter since taking office. It's unlikely that an announcement will be made before the spending review in October.

Photo by Jon Olav Eikenes

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