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Solar PV legal and regulatory issues

Solar PV legal and regulatory issues

In April 2010 a scheme, known as the FIT Scheme, was introduced to enable electricity supply companies to make payments to small- scale producers of low – carbon electricity. The purpose of the scheme was to encourage members of the public and the community to become involved in the low – carbon generation of electricity by specified types of technology. The system of Feed – in Tariffs (FITs) is designed to provide support and to encourage small – scale low-carbon generators. The sources of such generation were fore example biomass, wind and solar photovoltaic (solar PV).

 

FIT [Feed in Tariff]

The Feed-in Tariff comprises two elements, a ‘generation tariff’, that is payment for the amount of electricity produced by the small – scale low-carbon generator, even if that electricity is used by the person who generated it, and the ‘export tariff’ when payment is made for the amount of electricity exported into the grid.

The ‘generation tariff’ was recently considered by the Court of Appeal in Sec State for Energy and Climate Change v Friends of the Earth and Others [20120 EWCA Civ 28. The Court of Appeal held that a retrospective alteration to the rules was unlawful. Leave to appeal to the Supreme Court was refused.  Click here for the full transcript of the Court of Appeal decision. 

A number of issues have arisen over the use of inverters to convert DC supply to AC that can be used by the grid.Although guidance documents indicate that 'generating eqipment' includes the solar panels and the inverters, recent interpretations have taken a narrow view, thereby excluding domestic installations from the higher payments allowed under the tables setting out the categories. 

In order to be eligible for feed-in tariffs, any PV installation with a capacity of 50kW or less must have been accredited under the Microgeneration Certification Scheme (MCS) or any equivalent scheme which is subsequently introduced. Details of MCS accredited products and installers can be found at www.microgenerationcertification.org.

Planning and Construction.

Planning for Solar PV is generally easier than for other renewables. Permitted development rights exist for domestic microgeneration and works to industrial buildings, warehouses and offices, subject to listed building or conservation area issues.

One of the key issues is whether the roof can handle the weight of the solar panels. Surveys will often be undertaken, and the installer will need to consider the various issues including payment and performance warranties, maintenance, and delivery dates.

Contractual Structure

The owner of a PV system will need sufficient property rights to facilitate installation and operation of the equipment. Therefore, if it does not own all of the land or buildings over which rights are required, it will need consent from the person who does. Typically, consent will take the form of a lease which grants the system owner exclusive occupation of the area required for the PV panels. Where the relevant land or building is subject to a mortgage, the lender will probably need to consent to the lease as well.

The two most common types of contractual structure are

 a) Lease to developer

The building owner (the landlord) leases roof space to the developer of the PV system (the developer). The developer purchases the solar PV system (the equipment) and procures its installation. There may be an occupational tenant (the tenant) already leasing the building from the landlord.

 b) The landlord owns the equipment

In this structure, the landlord is investing in the equipment itself. The existing arrangements with the tenant may need to be varied. The landlord contracts directly with the supplier and installer of the equipment. If there is no tenant, this structure will be much simpler than that described in the paragraph above.

Practical Issues.

These will usually be determined by the intastaller when the initial site survey is conducted

  • AccessCertification. 
  • All equipment should be MSC certified.
  • The customer receives a certificate following installation, that is generally completed by the installer.
  • Cables/grid connection
  • Situation of the equipmentConnection and metering  - most solar pv installation companies, have automatic permission to connect to the grid  under 16 amps per phase 3.68 kW at 230v known as G83/1 stage 1 
  • regulation.Type of installation and attachment to the roof

Other Legal Issues

The Parties will need to consider the lease, option agreements, and other issues such as the developers planned company structure. Futher complications arise where the proptery is leasehold, in respect of rights of access to the equipment, diliapidations, repair etc.

The insurance position must also be fully considered, together with questions that arise at the temination of the lease or redevelopment.

Fundability: The installer will generally deal with the forms for FIT applications, to be signed by the customer. In cases where the installation is for a tenancy, then issues that need to be considered include questions of the sale and/or development of the building and consequental loss.

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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