Following a governmental meeting on solar power, François
Fillon, the French Prime Minister, announced the decision to impose
a four month moratorium on new solar power projects eligible for
the current legal power purchase obligation feed in tariff.
This four month moratorium should allow the Government to
prepare and adopt a new regulatory framework which will come into
force in March 2011. The new rules aim to reach a target of 500MW
of new solar projects per year and will include a decrease in the
feed in tariffs.
A first draft of the decree addressing this moratorium has
already been issued and is ready for discussions (hereinafter the
According to the Decree, the following solar power installations
are excluded from the freeze in the moratorium:
- installations with a scheduled installed power production
capacity below or equivalent to 3 kW;
- installations for which the owner, as of 2 December 2010, has
already paid to the grid operator, namely ERDF, the first
instalment of the total price of the connection to the grid.
However, further conditions apply to the above
installations to be excluded from the freeze, these
- the commissioning of the installation must intervene within
eighteen (18) months from the date of the payment of the first
corresponding instalment due to ERDF for the connection to the
- for installations for which the first instalment had already
been paid more than fifteen (15) months prior to the date of the
Decree coming into force, the commissioning of this installation
must happen within three (3) months following this date. It is
important to note that under the current version of the Decree it
is not 100% clear whether this last date shall be read as the date
of payment of the first instalment or the date of the Decree coming
into force, though logically it should be the date the Decree
coming into force. Clarification of this issue will follow
discussions due to take place in relation to the Decree.
Finally, according to the Decree, at the end of the four month
freeze, projects not excluded as described above, will fall under
the new regulatory framework. New applications for the benefit of
the power purchase obligations will have to be made for these
The Decree is currently being discussed. Opposition from all
counterparties is strong but the Government seems strong in its
conviction to the Decree being passed in its current, or very
similar, form. Further developments are awaited.
These changes may not be limited in their effect to France.
There is a concern that the actions of the French Government may
give the UK Government, which is facing similar concerns and
challenges with the UK FIT regime, some support for adopting a
similar MW limit. European countries need to instil clarity to the
renewable regulatory regimes which foster and support clean energy.
Many investors operate on a global basis and repeated signs of
uncertainty in the European markets will take their toll.
For further information or advice, please contact:
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