The first steps to close a regulatory loophole that could allow developers of new large solar photovoltaic installations to benefit from higher feed-in tariff incentives even after the level of subsidy is cut from next month look set to be taken this week.
The government will controversially cut feed-in tariff support for solar systems with over 50kW capacity by up to 70 per cent from 1 August, in response to fears that large solar farms would eat up funding earmarked for smaller rooftop installations.
However, when making the changes, officials failed to remove sections of the legislation that would allow some solar developers to bypass the cuts and continue to access the original feed-in tariff rates for large solar farms.
Sections 15 and 16 of the Feed-in Tariffs (Specified Maximum Capacity and Functions) Order 2010 remain in force, meaning that developers registering systems before the August deadline will receive the original rate for additional capacity built at the same site for up to a year afterwards.
The oversight was brought to light by solar resource web site Solar Power Portal, although the Department of Energy and Climate Change (DECC) told BusinessGreen that it had known about the loophole for some time and had fielded “a few queries” from solar developers.
A spokeswoman added that the department is likely to take action to close the loophole this week, but could not confirm what that might entail.
“We will be taking action shortly to close a technical loophole which still remains in the feed-in tariff scheme,” she added in an emailed statement. “This does not change our plans to introduce new tariffs for large scale solar developments from 1 August.”
Developers have been rushing to beat the deadline, and a number of large-scale solar projects have come online in the past month.
The loophole has raised the prospect of a number of registered projects extending their capacity in the coming months in order to further maximise returns through the incentive scheme.
The government’s efforts to close the loophole may have to go through a full consultation process and gain parliamentary approval, meaning that developers could have at least another seven weeks to create project extensions that are technically eligible for the higher rates of return.
The DECC spokeswoman could not confirm whether there would be any extension or how long it could last, as she said the government had not yet decided on a course of action.