Reaching Communities buildings grants and feed in tariffs
If you have received or are thinking of applying for a Reaching Communities
Buildings grant from the Big Lottery Fund (BIG) towards the costs of purchasing or
installing any electricity generating equipment such as solar panels or
waterwheels, you must be aware of the Office of Gas and Energy Markets
(OFGEM‟s) new policy on Feed in Tariffs “FITs” payments. This guidance is
intended for recipients of and applicants for grants from BIG but does not
constitute legal advice and you are responsible for ensuring that you seek your own
up to date advice if you are thinking of applying for any FITs and ensure that
advice reflects the position under the current Feed-in Tariffs Order.
As you may already be aware, the BIG Lottery Fund is a public body and therefore
any funding from the Lottery Fund constitutes „public funds’. This is because the
National Lottery and the apparatus by which it may distribute funds are
established by statute, therefore grants of lottery monies should be considered as
grants made by public authorities. The generation of electricity is an „economic
activity’ – it is normally done for a profit or it could be reasonably expected to be
done for a profit.
When public funds go towards supporting an economic activity in Europe, they are
regulated by the European Union‟s State Aid law. State Aid law normally limits
how much public bodies, such as the BIG Lottery Fund, can support anyone
engaged in economic activity. Normally when offering grants from public funds to
groups engaged in economic activities, public bodies would use the De Minimis
regulation for small grants and this would ensure that any economic activities were
compliant with regulation.
The Feed-in Tariffs Order 2010 came into force on 1 April 2010 and provided that
GEMA (Gas and Energy Markets Agency) must not accredit an installation as eligible
unless the installation had given notice no grant from public funds had been made
in respect of the costs of purchasing or installing the installation.
Until the 1st July 2011, any installations that had received grants towards the cost
of the solar panel equipment or installation of the solar panels would have been
eligible to apply for FITs payments as long as the total amount of subsidy from
public funds was beneath the De Minimis level. If you have received a grant before
the 1st July 2011, you should confirm that you will still be eligible for FITs
payments. FITs payments are regulated by the GEMA and eligibility has been
determined by legislation implemented by OFGEM.
Unfortunately, as a result of changes made by GEMA to the Feed-in Tariffs Order
2010, installations that have received grants towards the costs of purchasing or
installing an installation after the 1st of July 2011 are not be eligible for receiving
FITs payments for power generated. These changes have come about as the
government seeks to preserve value for money for consumers and taxpayers by
preventing a double subsidy. These changes do not apply to installations in
Northern Ireland, where powers are devolved to DETINI or the Department of
Energy, Trade and Investment Northern Ireland.
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Therefore if you have received funds from the BIG Lottery Fund towards the costs
of your solar panel equipment and/or the cost of installation, you will not be
eligible for FITs payments. However if you intend to pay back the full value of
your grant, you may be eligible for the FITs scheme. If so, please speak to your
Funding Officer at the BIG Lottery Fund regarding repayment options in the first
instance.
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