Opening Up Renewable Energy

The Government will implement the Feed-in Tariff or Clean Energy Cashback Scheme this April. The idea is to pay for the energy generated and exported to the electricity network by renewable generation systems and, therefore, further extend electrical power generation beyond the traditional energy companies.

Benefiting both household and business users, the Tariff supports all renewable electricity generation sources up to five megawatts including hydro-power, wind power, combined heat and power (CHP) and solar photovoltaic (PV) - one of the most popular systems - which generate electricity using nothing but daylight. The credits given for the electricity will be guaranteed at the same rate for 20-years for all technologies, except PVs where they will apply for 25-years.

Good supply and installation companies should be able to assist with advice on solar PV installations and the financial incentives available. The grant application itself takes just ten minutes to fill out and applications take a week to be approved. Building owners have six months to carry out the installation from the date of grant approval but, where a grant is offered, there is no obligation to go through with the installation.

As well as having long-term cost benefits, renewable energy generation helps tackle the challenge of climate change and maintains security of energy supply. Across Europe, Feed-in Tariffs have done more than anything else to increase the installation of renewable energy capacity. In Germany, which has had Feed-in Tariffs since 2000, 130,000 homes are fitted with PV panels each year.

The UK Tariffs are likely to vary depending on the application. PV systems integrated into new buildings will be treated differently to those retrofitted onto existing buildings, for example. Another category is stand alone PV systems installed primarily to feed power into the grid.

Undoubtedly, the rate at which the Feed-in Tariff is set will be a hugely important factor for many in deciding to install a renewable energy system. The Department of Energy and Climate Change (Decc) has yet to announce the figures but it seems likely that homeowners may be paid 36.5p for every kilowatt-hour they generate, even if they use it themselves, with an extra 5p for each kWh exported to the grid. Some suggest that these figures may be higher.

Whatever the final figure, Alistair Darling, the chancellor, has already provided a powerful incentive for the installation of renewable energy systems with his announcement that the proceeds from the Feed-in Tariff will be tax-free.

by: Philippa Worley

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