Solarplicity Supply Ltd: provisional order (failure to make FIT payments)

Opened:
May 2019
Closed:
Aug 2019
Company:
Solarplicity
Regulation Area:
Sectoral Regulations

On 17 August 2019 the Authority revoked Solarplicity Supply Limited’s licences to supply gas and electricity following its announcement that it would cease trading. As a result, the provisional order issued to Solarplicity Supply Limited on 10 May 2019 is no longer in effect.

Decision to confirm Provisional Order (with modifications)

On 8 August the Authority decided to confirm the provisional order with modifications, following the consultation period. The consultation ended on 1 August 2019.

The reports provided by Solarplicity to Ofgem showed that Solarplicity didn’t make payments to FIT Generators when they were due. In addition, Ofgem considered the three representations received from generators during the consultation period. The Authority was satisfied that Solarplicity was contravening (and is likely to further contravene) Standard Licence Condition (SLC) 33.2 and in particular paragraph 3.2.5 of Part 1 of Schedule A relating to Feed-In Tariff (FIT) payments.

Ofgem issued the provisional order on 10 May. This provisional order required that Solarplicity makes all outstanding FIT Payments due to FIT Generators when those FIT Payments become due. Solarplicity was also required to provide reports to the Authority evidencing that the FIT Payments due to FIT Generators have been made.

Notice of Proposal to confirm

On 10 July the Authority published a notice of its intention to confirm and modify the provisional order (PO) in relation to Solarplicity’s FIT payments. The consultation on this proposal closed on 1 August 2019.

The Authority understood that Solarplicity’s financial position appeared no better in July than when the provisional order was issued, and therefore considered that Solarplicity would fail to make FIT payments without the provisional order being confirmed.

Solarplicity has agreed payment plans with FIT Generators to make all outstanding payments for quarter 3 of FIT year 9 (1 October 2018 – 31 December 2018). In early July 2019, we received communications from several FIT Generators explaining that they had not received the FIT Payments due to them at the end of June in line with their agreed payment plans with Solarplicity, contravening the PO.

Issue of provisional order

On 10 May 2019, the Authority issued a provisional order to Solarplicity in accordance with section 25 (2) of the Electricity Act. The Authority had been in discussions with Solarplicity regarding its compliance with its obligations under 3.2.5 of Part 1 of Schedule A of Standard Licence Condition (SLC) 33 relating to FIT.

In February 2019, we received communications from several FIT Generators which claimed they had not received the FIT Payments due to them for Quarter 3 of FIT Year 9 (1 October 2018 – 31 December 2018). We subsequently found that many payments due to FIT Generators by 21 February 2019 had not been made. Solarplicity provided a revised date for payment of 5 March 2019, but in most cases this revised payment date was not met.

This provisional order requires that Solarplicity makes all outstanding FIT Payments due to FIT Generators by 16 May 2019, and that it makes all future FIT Payments that become due to FIT Generators when those FIT Payments become due. When making FIT payments, Solarplicity must not give preference to any FIT Generator connected in any way to Solarplicity by virtue of its ownership (being part of Solarplicity’s group of companies) or directorship. Solarplicity must also provide reports to the Authority evidencing that the FIT Payments due to FIT Generators have been made.

Provisional orders are issued in certain circumstances in accordance with the statutory framework and where certain conditions are satisfied. Further information regarding provisional orders is contained within our Enforcement Guidelines.

For information relating to this provisional order, please see documents below.