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Community groups can get the feed-in tariff and grant funding (sometimes)

Posted by Tasha Kosviner on 6 December 2013 at 9:54 am

Q. We are a community group who have received a grant to install some solar PV panels on the roof of our village hall. I understand that receiving a grant disqualifies you from receiving feed-in tariffs – but I’ve also heard that there are some exceptions to this rule. Can you please clarify?

A. The feed-in tariff scheme (FIT) is intended to replace the public grant schemes as the principle means of incentivising small scale, low carbon electricity generation. Instead of an upfront grant, the scheme operates by means of periodic, post-installation payments based on the amount of electricity your system generates and feeds back into the grid.

To be clear, the European Commission’s rules on state aid do not allow those who have received a public grant to then claim further incentives that may exceed the value of the initial installation in case it distorts competition and trade within the EU.

Assuming that the grant you received is a public grant – that is a grant made from public funds, or from a body distributing funds on behalf of a public body, including the National Lottery – then the chances are you will not also be eligible for FITs.

However, if your grant has been made to cover 'reasonable additional costs' of measures that seek to avoid or mitigate environmental harm of the installation, then you may be allowed to keep it and still apply for feed-in tariffs. 

Ofgem uses the example of measures that seek to protect fish and other wildlife in small hydro schemes, but says that it is unlikely that any measures associated with solar PV, wind or CHP, where environmental problems are rare, would be considered. 

It also points out that the grant must not exceed the total cost of the mitigating measures and that it must have been used to pay for those measures and nothing else. The burden of proving that this is the case lies with you, so make sure you keep a paper trail of grant applications and receipts that show where the money went. 

It also used to be the case that grants would be accepted if they complied with the European Commission’s rules on de minimis aid. The de minimis regulation states that the total overall financial support received, both from grants and FIT payments, must not exceed a certain threshold, currently 200 million Euros. However, the rule only applies to grants that were accepted before 1 July 2011 for installations commissioned before 1 October 2011.

If you do not fit into either of these groups then you will not be eligible for feed-in tariffs unless you pay your grant back. To help you work out how much your installation might earn from feed-in tariffs, and whether it is worth paying your grant back, contact the Energy Saving Trust on 0300 123 1234. If you do decide to pay your grant back in order to be eligible for feed-in tariffs, contact your grant issuer for information on how to proceed. 

More information

YouGen guide to feed-in tariffs

From the blog

A case study in solar-powered heat pump in a community building (Oct 2013)

Can I get the feed-in tariff and a grant? (July 2010)

Photo Credit: Omar Eduardo via Compfight cc

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