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Feed in tariffs - Gordon Miller, WhatGreenHome.com

Feed in tariffs

Wayne ‘fashion guru turned housing commentator’ Hemingway’s lament that such is Government policy rather than us all living in ‘Barratt style rabbit hutches”, as we do now, we will soon all be living in ‘Barratt style rabbit hutches with solar panels on the roof” came a step nearer reality last week.

A Government initiative to pay homewowners to generate their own electricity from renewable sources was launched to great fanfare. The scheme, known as the Clean Energy Cash Back scheme or feed-in-tariff (FITs) commences 1 April 2010. Under the initiative, homeowners could earn as much as 41.3p per kWh of electricity generated – with an additional minimum of 3p per kWh for electricity exported to the national grid.

Government department DECC estimates a typical 2.5kWp well sited (south or south west facing) solar photovoltaic installation could earn the homeowner up to £900, and save them £140 a year on their electricity bill. Homeowners who install PV on their own homes will receive the highest tariff. Payments will also be made to those generating electricity from wind and hydroelectricity.

Juliet Davenport, Founder and CEO of Good Energy, which pioneered payment to domestic microgenerators in the UK prior to the new Government initiative, said: “It’s great this has now arrived. Good Energy has shown for many years that financial incentives work on a commercial scale, benefiting generators at minimal cost to the energy consumer when delivered effectively.

“The rates that will be paid to renewable generators should provide the incentive that a lot of homeowners, landowners and businesses have been waiting for to generate their own energy, allowing them to follow the pioneering individuals that have put their own generation in already.”

People like Jeremy and Sue Bugler from Herefordshire. The Buglers were inspired to generate their own renewable energy to make a difference to protect the environment for future generations. Jeremy said, “We want our grandchildren to know that we made an effort. We feel they will have a lot tougher time of it than we have had. More selfishly, we are protecting ourselves against future energy price rises.”

The Buglers had a 1.75kWp solar photovoltaic array installed in March 2009. They originally estimated it would generate approximately 40% of their annual electric needs. Their latest electricity bill indicates the saving may be as high as 80%. The PV system cost net £8,000 as they received a grant of £2,500 from the Low Carbon Building Programme. The couple is now considering having a micro hydroelectric plant installed.

The introduction of FITs is expected to halve the current payback time for the installation of microgeneration technologies, such as PV, to around ten years for the Buglers and others. The DECC states the electricity consumption of an average three-bed home in the UK is 3,300 kWh per year. A 2.5kWp solar electric system is expected to generate 2,125 kWh per year.

The average cost of a 2.5kWp solar PV installation currently stands at around £12,500. The payback period based on the above figures is estimated at ten years, equivalent to a return of 9% and income and savings of £25,000 over a 25-year period. Until April 2010, a Government grant of £2,500 is available through the Low Carbon Building Programme, which improves payback and return further.

The tariff levels announced last week apply to installations that are completed from 1 April 2010 to 31 March 2012, after then the rates decreases. The tariff is guaranteed for 25 years for PV; and 20 years for installed wind and hydroelectricity microgeneration. All tariffs will be linked to the Retail Price Index (RPI) which ensures prices rise with inflation.

The FITs announcement is likely to see an increase in ‘cowboy’ installers. Beware speculative door-knockers. The Government agency the Energy Saving Trust has a register of approved installers. Market leaders include Solarcentury, which has installed more than 2,000 solar systems, including those on the Eden Project, Vauxhall Cross Bus Terminal and Europe’s largest vertical solar facade on the CIS Tower, Manchester.

Marian Spain, Director of Strategy, Energy Saving Trust, said: “Research suggests that at least 800,000 householders could benefit from FITs. The Energy Saving Trust has appointed new specialist advisers around the country to advise people on choosing the right technology for their homes, and a forthcoming tool on our website will allow people to calculate what the cash back could be worth to them.”

Nick and Helen Bradshaw from Putney, south-west London, installed a 1.3kWp solar photovoltaic array two years ago, as well as solar thermal panels and a wood-burning stove with back boiler. They estimate the PV array generates approximately 33% of their annual electricity needs. They have reduced their home’s dependence on fossil fuels by 60% compared to four years ago.”

The PV system cost £8,000 and the couple received a grant of £2,500 from the Low Carbon Building Programme. Nick, who works as an architect, said, “The ambition was to green the way we us our home without compromising its appearance. We didn’t want to turn the house that we like the look of into a battleship. The PV array is designed to be very low maintenance and self-cleaning. We have yet to have a problem with it.”

CONTACTS:
Energy Saving Trust 0800 512 012 www.energysavingtrust.org.uk
Good Energy 0845 6011410 www.goodenergy.co.uk

Gordon Miller

Gordon is a journalist and founder of eco homes website whatgreenhome.com

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