Early closure of solar subsidies leaves 12MW of community renewables in limbo

Communities across England and Wales are set to lose out on at least 12MW of new solar capacity, after the government's flagship subsidy scheme closed early.

Community Energy England (CEE) claims at least 12MW of community solar projects missed out on gaining a Feed-In Tariff (FiT) under the >50kW band, which maxed out its capacity and closed to new entrants this month, over two weeks earlier than expected.

The FiT scheme is due to close entirely on March 31, and most community groups were working to submit their schemes by that deadline. But a rush of FiT applications for larger schemes meant the >50kW tariff band filled up faster than expected and closed on March 13, leaving many of the community groups that were finalising their applications disappointed this week, the CEE said.

Those projects which missed out on gaining a FiT contract now have little hope of bringing their plans to fruition, CEE CEO Emma Bridge told BusinessGreen. "I think most of them have probably died rather than stalled," she said, adding that there is no policy framework in place to support such schemes going forward.

"[Energy and Clean Growth Minister] Claire Perry has said that community energy is a cornerstone of her energy transition, and community energy was mentioned as a sector BEIS would consider at a later date as part of the support mechanisms," Bridge said. "But we don't know any timescales of when that might happen, what those support mechanisms might be. So as it stands at the moment I can't see how any of those projects stand to go forward in the next year or so."

Most of the impacted community projects were schemes that would have delivered strong local benefits, Bridge said, such as rooftop solar for local schools and village halls. 

For example, a 125kWp solar farm and battery storage in Staffordshire designed to supply electricity to a local manufacturing company missed out on a contract. The site would have been owned and operated by Calleva Community Energy, a community benefit society which aims to invest 50 per cent of its profits into neighbourhood community projects and fuel poverty initiatives.

Meanwhile, plans for a 130kw rooftop solar array on a school in London also missed out. The scheme would have provided discounted electricity to the school and directed surplus income into a community benefit fund, which would have been used to fund community initiatives in the surrounding area.

Bridge said the 12MW of lost capacity - 3.9MW in England and 8MW in Wales - could just be the tip of the iceberg. "They are the ones we know about," she said. "There will be a lot out there that we don't know about as well."

Analysis from the Renewable Energy Association (REA) last week suggested in total 16MW of rooftop solar missed out on the >50kW accreditation under the FiT - enough capacity to power 3,300 homes. The REA said it is pressing government to reallocate capacity from lower bands to larger projects to allow them to gain a contract.

Meanwhile, Bridge argued the government should have lifted the capacity cap in operation on the FiT for the final few days of the subsidy scheme's existence, as a gesture of goodwill to allow all submitting schemes to gain a contract before the route to market closed for good. That would have helped engender goodwill for the government's wider clean power agenda, she argued.

The Solar Trade Association also said it wrote to the Department for Business, Energy and Industrial Strategy (BEIS) and Ofgem this month expressing its concern at the "poor communication of data which has left members and investors with stranded projects".

BEIS confirmed plans to close the FiT for good in December 2018, arguing it was the right time to end the flagship scheme. "The Feed-in Tariffs scheme has overachieved on its original objectives, outstripping installation predictions by nearly 100,000 with over 820,000 solar installations producing enough power for two million homes," BEIS said at the time. "But it's only right we protect consumers and adjust incentives as costs fall, with solar having fallen by 80 per cent, and we will consult shortly on a future framework for small-scale renewable energy generation."

The Department was considering a request comment on the early latest FiT band closure and its impact as BusinessGreen went to press. Ministers and officials have repeatedly stressed the government's commitment to building a more decentralised and smarter local energy network.

Plans are underway for a Smart Export Guarantee, where small-scale generators will be paid for excess clean power discharged to the grid. Energy and Clean Growth Minister Claire Perry said when the new scheme was announced that it would help build a "bridge to the smart energy system of the future, with consumers firmly at its heart - not only buying electricity but being guaranteed payments for excess electricity they can supply to the grid".

Meanwhile, some opportunities are starting to emerge for commercial solar post-subsidy. Last week AMP Clean Energy and Eden Sustainable announced a new funding partnership to develop and finance solar projects in a post-subsidy environment. The first deals - which will supply power under a Power Purchase Agreement - include a 190kW solar array to deliver green electricity to a consumer goods firm, as well as plans for a 200kW project for an Academy trust.

But Bridge said there is no specific help on offer for community energy, which often has a more challenging business case than schemes developed by and for commercial teams. "There's no stable framework," she said. "These are projects that have been built up with the community, for the community, and yet the rug keeps getting pulled out from underneath them. So we do need some sort of clarity and longer term policy framework. "

As the FiT draws to a close, it seems community group's frustration over the government's handling of distributed renewables policy shows no sign of subsiding.