Monthly Archives: March 2012

RHI cost control consultation

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Alongside yesterday’s announcement from DECC of the extension for RHPP was the launch of a consultation on their proposals to introduce an interim cost control mechanism for the RHI budget, pending the setting up of a more structured measure in the future.

This proposes to simply suspend the scheme should the current year budget be spent and represents a return to the style of operation that destroyed the Low Carbon Building Programme (LCBP) grant funding mechanism that the RHI and FiTs was designed to replace. One of the options under consideration is for the scheme to be closed down with no notice period at all.

Can DECC really be serious about this? Just check that April 1st hasn’t come early.

But just maybe it isn’t anything to really worry about. If you look at the budget versus actual figures so far (included in the consultation document) then the RHI is not proving to be attractive in the non-domestic sector.

Financial year     Budget (£m)
2011/12            56
2012/13            133
2013/14            251
2014/15            424
Total              864

This includes the £15 million allocated to RHPP in the present year and the announced £25 million for the coming year. The actual spend in the current year is less than £5 million representing a total underspend of £51 million and DECC are predicting a total spend in the coming year of only £55 million against the budgeted £133 million – another underspend of some £78 million.

The only problem here is that if a budget is underspent in any financial year then that money disappears and is lost from the RHI budget as there is no carry-forward of unspent cash.

So in its first two years the RHI will have underspent a total of £129 million. Not exactly a major success story and if this was to continue then the budget control mechanism would never actually be used.

National Planning Policy Framework expected today

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The new National Planning Policy Framework (NPPF) for England is due to be published by DCLG today and embodies a presumption in favour of ‘sustainable development’. What can we expect?

Well minister Greg Clark has said ”sustainable means ensuring that better lives for ourselves don’t mean worse lives for future generations” and that ”development means growth”.

So ‘not much’ would be my expectation.

DECC stumble on with RHI

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DECC today announced an extension of the Renewable Heat Premium Payment (RHPP) scheme for domestic heating. With the first phase scheduled to end on 31st March and the full RHI not expected to start until October, there has been widespread concern over what would happen to cover the interim period.

Less than £5million of the originally budgeted £15million for RHPP has been spent to date.

Alongside this DECC will also put in place control measures to contain the potential total costs of the RHI. Although, with the poor take-up so far at the non-domestic level, it remains to be seen just how necessary this will be.

Greg Barker said: “Looking at the scheme’s current spending it’s unlikely we will need to use these short-term measures, however Ofgem will hold a series of conferences for potential applicants over the next few months so it is right for us to be cautious and have the ability to act should we need to.”.

Supreme Court rejects DECC request to appeal

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The Supreme Court have announced that they have rejected the application from DECC to appeal against the earlier High Court ruling that their attempt to implement retrospective change to the Feed-in Tariff scheme was unlawful.

This leaves everyone who installed PV systems between the proposed deadline of 12th December 2011 and the 3rd March 2012, when new legislative changes were implemented, on the full tariff of 43.3p for a system not exceeding 4kW.

Now the question will be – how many will seek compensation for their losses brought about by the unlawful action of the government?

Permitted development arrives for non-domestic microgeneration

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A new Part 43 has been added to the permitted development regulations that finally allows microgeneration on non-domestic properties. This comes into force from 6th April but applies in England only.

There are a few major differences from the equivalent domestic permitted development, such as:

solar panels cannot be installed within one metre of the edge of a roof, solar panels cannot be installed on the roof of a building within a conservation area, wind turbines and air source heat pumps are not included.

Also included is a minor change to the existing wording of Part 40 for domestic installations that has minimal effect.

The Town and Country Planning (General Permitted Development) (Amendment) (England) Order 2012

EAC/ECC joint committee – government response

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The joint Environmental Audit Committee and Energy and Climate Change Committee of the House of Commons has published the official government response to their earlier recommendations following on from last year’s carpeting of Greg Barker.

This, in  part, confirms that PV installations that have been installed between the 12th December 2011 and 3rd March 2012 should continue to receive the higher tariff (43.3p plus RPI for upto 4kW systems) until such time as a Supreme Court decision is made in DECC’s favour and suitable amendments to legislation put in place.

The Government has though made clear that if it wins an appeal to the Supreme Court, it reserves the right to stand by the original proposal involving a December 2011 reference date. Prior to making any such decision the Government would give full consideration to consultation responses on this subject, together with the Committees’ recommendations. The budgetary implications would also be central to any decision. For the avoidance of doubt, in the event that the Government wins an appeal and decides to proceed with the reference date, those installations affected would continue to receive the current, higher tariff for electricity they generate until the Government has made the necessary legislative changes. The timing of any such change would depend on the length of the appeal process to the Supreme Court and would be subject to the parliamentary process set out in the Energy Act 2008.

So this does give some comfort to those householders who have taken a gamble that they will, at least for the time being, receive the full rate. But whether there will be any subsequent ‘claw-back’ of the higher payments does remain to be seen.