Yesterday DECC announced its response to the consultation on the extensions provisions under the FIT Scheme. The consultation, which was launched on 27 July 2011, looked to amend the current provisions which provide the ability to extend an existing accredited Eligible Installation within 12 months of its Confirmation Date and to obtain the FIT Tariff that would have been applicable to the extended installation as at the original installations 'Eligibility Date'.
The response to the consultation confirmed that the Government is going to proceed with amending the extensions provisions but they have decided to implement a modified version of the proposals that were contained in the consultation. The changes will be as follows:
- From the date of commencement of the Order, an extension to an installation which occurs within 12 months of the Eligibility Date of the original installation will be subject to the same rules as those applying to an extension which occurs more than 12 months after the Eligibility Date of the original installation, namely that:
- The tariff for the original installation (excluding the extension) will remain unchanged, but, once it has been commissioned and accredited, the extension will be given a separate Tariff Code and have a different Eligibility Period.
- The tariff for the extension will be based on the aggregate Total Installed Capacity of the original installation and the extension, and on the tariff rates applicable at the Eligibility Date of the extension.
DECC have also included a transitional provision to address concerns raised that procedurally FIT Generators were unable to extend due to a delay in the original accreditation process. In the interim period before the amending Order comes into force, the current rules on extensions will apply both:
- where an extension is made to an accredited installation and that extension is commissioned and notified to Ofgem before the commencement date of the amending Order; and
- where an extension is made to an eligible installation that has been commissioned and has applied for accreditation (and is subsequently accredited), and that extension is commissioned and notified to Ofgem before the commencement date of the amending Order.
These changes will come into force on 18 October 2011 and the "new rules on extensions will apply to all extensions unless they are commissioned, and Ofgem or suppliers receive notice in respect of them, before 18 October 2011".
Finally getting clarity on when these changes will come into force, enables those projects which are looking to use the current provisions to assess whether they will meet the 18 October deadline and has provided potential investors with more certainty in this regard. The transitional arrangements have also helped to overcome concern regarding the procedural difficulties of extending an installation when FIT Generators had not received confirmation that the original installation had been accredited. The result of the consultation does not come as a surprise but marks the final blow to the large scale solar pv market.
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