Originally published 10 February 2011

Following the Government's announcement of its intention to review the feed in tariff (FIT), and to fast track the review for anaerobic digestion and large scale solar PV projects, Eversheds recently hosted a meeting of the REA and many of its members to co-ordinate a collaborative and comprehensive response.

Representatives from a spectrum of solar companies and investors were in attendance to discuss the Government's intention to fast track the review of large scale solar projects before the Summer recess. The Government is defining large scale projects as being over 50kW. It is not yet clear whether aggregate solar PV projects, such as those linked with local authorities and housing associations, will be included in the fast track review.

We understand that the review will not look to change the eligibility criteria directly but at this stage the intention is to review the tariff only. Any resulting change to the tariff, if approved by Parliament, could be implemented as early as July 2011. The new tariff would apply to all projects accredited after July 2011 and will not be retrospective. However, because the implementation date is July, notwithstanding significant investment having been made very few projects will be accredited by then. Therefore, many funders and developers perceive the net effect of any change to the FIT as being retrospective.

Howard Johns of REA member Southern Solar and also chair of the Solar Trade Association, chaired the meeting. He focused the attendees on the how best to co-ordinate a response through the following channels: consultation process; potential legal challenge; parliamentary lobbying; effective PR campaigns and building a strong evidence base. In particular, it was agreed that the REA should attempt to influence the content of the consultation paper whilst making clear that they are not in agreement with the review.

It is anticipated that the consultation paper will be published during March 2011.

The REA and those members represented will remain resolute in their objection to the review, whilst continuing to lobby Parliament and seeking to ensure that a long term view of the solar PV industry is taken by Government.

The REA and members present at the meeting wanted to ensure that correct messages in relation to solar PV are portrayed in the media, whilst drawing attention to the detrimental impact the review will have, not only for the solar PV industry as a whole, but also to private finance support for the Government's 2020 Renewable Obligation target.

The finance community requires investment certainty which will be undermined if the review results in a FIT change within a timescale in which virtually no developers can achieve accreditation.

In addition, the Government must note the importance of decentralised energy if it is to achieve its 2020 target.

Many REA members are also seeking legal advice in relation to the Government's announcement and the legal processes in connection with the review.

We will continue to keep you informed as matters progress and will also be actively engaged in the consultation and the legal review.

For further information, please contact:

Michelle Thomas
Partner, Head of clean energy and sustainability
Tel: 0845 498 7553
michellethomas@eversheds.com

Stephen Hill
Partner
Tel: 0845 497 7572
stephenhill@eversheds.com