Consultation on the transferability of building-mounted solar PV installations – government response

DECC published the response to its consultation on the transferability of building-mounted solar PV installations on 20th March 2015. From summer 2019 medium and large (>50kW) building-mounted solar PV systems will be allowed to be moved between buildings without the loss of Feed-in Tariff (FiT) payments. Inability to do this has long been identified as a barrier to the uptake of PV in this important market segment, so the decision is a welcome one.

A large majority of the consultation responses (86%) supported the proposal, which DECC specifies applies to those installations referred to in the legislation as “other-than-stand-alone”. It will only apply to new installations, the rationale being that its purpose is to stimulate new deployment rather than support existing installations. The Impact Assessment assumes that introducing the option of transferability will increase deployment by between 5% and 10%, by reducing the financial risk.

Introducing the right to transferability will require the government to enact secondary legislation under FiTs later in 2015. However giving Ofgem the power to charge its administrative costs on a ‘cost-recovery’ basis will require primary legislation, which can only be done once the FiT secondary legislation is in force. DECC hopes to complete this in time for the right to be available for new installations in the summer of 2019.

As proposed in the consultation, there will be no FiT payments made during the transfer period and the period of FiT eligibility will not be extended.

The consultation set out a number of conditions that would apply to transferability and some of these have undergone significant modification. A summary of the key decisions is as follows:

  • Installations will not be required to remain the same size. If the installation increases in size then the additional capacity will be treated as an extension under the FiT legislation and if it decreases in size then it will be eligible for either the same, or a lower, tariff.
  • The consultation proposed that an installation will not be able to transfer location in the first 5 years that it is entitled to FiT payments. This received significant opposition from respondents and the government has now decided that, instead, “no transfers will be allowed until 4 years after the legislation has come into force. After these four years have passed installations that meet the eligibility date condition will be able to transfer at any point in the FiT payment period”.
  • Planning permission and grid connection acceptance for the new location will not be required in advance of the move, as these are not a requirement for accreditation under the FiT. Planning permission does not, however, carry over to the new site and may be needed for the building being transferred to.
  • The consultation proposed that where the installation formed part of compliance with the building regulations’ new build energy performance requirements of the building it was originally attached to, then the transfer will not be allowed. This condition is being removed because of the logistical difficulties in its administration. The condition will be replaced with an advisory note for owners to warn them of the potential need to ensure that all the necessary building regulations, planning and other requirements have been satisfied, and the potential consequences in terms of enforcement action that could result from them failing to do this.
  • The consultation proposed that the owner of the transferring solar PV installation must inform the local planning authority of their intention to transfer, however the government have decided that imposing a condition for this to be done as part of the FiT is unreasonable. Instead this area will be covered by the DECC advisory note for owners referred to above.

Administrative process to transfer installations

A majority of respondents agreed with the administration process proposed in the consultation document but many, including ourselves, were concerned about the level of Ofgem’s fee that could be charged to transfer their location. The government plan to introduce primary legislation to allow Ofgem to charge a fee on a cost-recovery basis (including their development costs, estimated at £300k), once the FiT secondary legislation has been enacted. DECC will not commit at this stage to a cap on this fee as the administration costs are not yet fully known. It plans to keep this area under review and will consider other mechanisms should the fee act as a clear barrier to uptake.

 

Renewable Energy Association

23 March 2015