Failing suppliers: How renewable power has been penalised

So far this year, 14 electricity suppliers have had the plug pulled by Ofgem, affecting hundreds of thousands of homes and customers. With winter on the way the expectation is that more will follow suit as temperatures plummet, demand soars and increased costs start to bite.

One unexpected victim of so many suppliers crashing out has been renewable generators. Suppliers are responsible for paying them a key subsidy known as the Feed in Tariff. This is paid four times a year, so for small or community generations schemes, not only is the subsidy a critical element of the balance sheet, but missing a quarterly payment can be disastrous.

When the supplier goes bust, Ofgem steps in as overall regulator and ensures that all renewable generators can continue claiming their Feed in Tariff from a new supplier, so it would appear everything is fine.

Not quite.

As one of our clients learned earlier this year, not all renewable generators are protected by Ofgem. In August this year, Solarplicity went bust, but they had been struggling to pay their bills since 2018. Not unreasonably, our client decided not to stick around with a supplier who didn’t pay their bills and switched to a bigger supplier in March, confident that Ofgem would keep them right. It was not to be.

Following discussions with Ofgem we learned their policy was only to make good renewable generators who had been signed up with Solarplicity at the time they went bust. Switch even a day before and Ofgem’s policy was not to allow that generator to recover any unpaid sums.

We put a detailed case to Ofgem explaining how they could use the existing regulations to help clients in the same position as our own, and also why this would be a beneficial change to make.

To our client’s delight, Ofgem have now confirmed they are changing their policy as a result of our submissions, and will enable all renewable generators in our client’s position to make a full recovery. As a consequence all recipients of the Feed in Tariff who may have moved away from one of the fourteen suppliers this year before they went bust should contact their new suppliers about recovering any lost sums.

Renewable Energy

Our lawyers assist clients with onshore wind projects, hydro and solar energy, and biomass, providing advice and insight into insider knowledge and practical know-how.

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