The UK renewable energy industry, suppliers and lobby groups have given a positive response to today's government announcement of the Feed-in Tariff (FiT).
The government-backed financial incentive pays owners of small scale renewable energy devices a fixed premium for every unit of electricity generated and will come into force on April 1.
BWEA, the UK’s leading renewable energy trade association, hailed today’s publication of feed-in tariff payment rates as a further step in the ‘green energy revolution’ changing the way electricity is generated and used in Britain.
The organisation claims the new green incentives will stimulate the growth of the UK small wind manufacturing industry, the only microgeneration technology in which the UK leads the world.
The Association calculates that the feed in tariff could pay up to £10,000 per annum to an owner of an 11kW small wind turbine in a location with good wind speeds. The range of tariff levels is such that it encourages all levels of investment, from householders and farmers to small and medium sized businesses.
Wind energy is set to get from 4.5 pence to 34.5 pence per kilowatt hour, making wind turbines an attractive proposition for everyone with a good location.
Maria McCaffery, BWEA Chief Executive, said: “The feed-in tariff has encouraged substantial renewable energy deployment across Europe and we are certain that it will have the same effect in Britain.
“In time, it will significantly increase the proportion of electricity generated by all small renewable energy devices, while fostering self reliance and clearly establishing the link between generation and consumption of electricity.”
In two examples, the Association has highlighted that an 11kW device with an installation cost of around £44,000 at site with a wind speed of around 5 meters per second could yield a total income of £10,026 per annum; while a 6kW device costing in the region of £22,000 under the same parameters could return £3420 per annum.
These examples, the BWEA say, are typical of the expected 5-10 year payback for well-located small wind systems.
Alex Murley, BWEA Head of Small Systems, said: “Today's announcement on feed in tariffs is a historic day for UK citizens, the UK energy sector, and anyone interested in reducing their energy bills.
“The Department of Energy and Climate Change (DECC) has unveiled a tremendous policy agenda that will stimulate UK small scale wind manufacturing, create thousands of UK jobs, and transform national attitudes towards energy generation and use.
“To expedite this green energy bonanza we now need the introduction of Permitted Development Orders, to ensure that installing your own turbine is a routine and streamlined process."
Good Energy pioneered offerings to small generators in the UK with its award winning HomeGen scheme and says it still offers the highest paying financial reward to microgenerators.
Juliet Davenport, Founder and CEO of Good Energy, 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.
"Good Energy will be the place for microgenerators to come – people know that when they are dealing with Good Energy, they are working with a company committed to making sure the UK delivers for microgenerators. We have been running incentivised microgeneration schemes for more than five years so we are the obvious trusted partner for any microgenerator.
"Good Energy supports over 1000 'energy entrepreneurs' and has more generators per customer than any other energy company in the UK. Because of this, we have systems in place to be able to deal with large numbers of generators and we believe that this will give us the edge over our competitors.
"However, the work is not yet over. Barriers caused by under-resourced and under-trained planning services still need to be addressed - expecting the current planning regime to deliver on the future energy policy of the UK is a tall order and more needs to be done to support planners in their work."
Good Energy says it also pleased that the government is following its lead and has announced plans for a Renewable Heat Incentive in 2011. Since 2008, the company has been paying solar thermal generators a reward for the heat energy they generate with its own RHI which is funded by revenues from Gas+, Good Energy’s gas product.
Juliet Davenport added: "We wholeheartedly support the introduction of a Renewable Heat Incentive. We were the first - and are still the only - supplier to introduce our own version of a renewable heat incentive. Our award-winning HotROCs scheme has shown that financial incentives work on a commercial scale. Just as we’ve been encouraging people to generate their own electricity, we’re aiming to encourage renewable heat generation at home and reduce the UK’s dependence on gas."
And installer Solarcentury also welcomed the announcement saying the scheme will make solar electricity a viable option for UK homeowners
Jeremy Leggett, Executive Chairman of Solarcentury said: “Home energy generation and associated jobs have been given a huge boost today. The Government's financial incentives for homes, communities and businesses to generate clean electricity marks the start of a solar revolution in the UK.
“For the UK to reach its carbon reduction targets, people have to be given the opportunity to generate their electricity in a rewarding and accessible way, this makes it possible.”
But the cash payments are “lacking in ambition”, says Friends of the Earth.
The environmental campaign group, which led the campaign for a feed-in tariff, said that the payment levels should have been set to produce a 10 per cent return on investment instead of the five to eight per cent return that has been agreed.
It claims that although the Government announced some "welcome" improvements to its feed-in tariff proposals today, such as increasing tariff payments with inflation, the scheme is still predicted to contribute just two per cent of UK electricity by 2020, despite research which shows that the scheme could generate three times as much with increased tariff payments.
Friends of the Earth's green homes campaigner Dave Timms said: "The introduction of cash incentives to boost small scale green electricity generation is welcome - however, Ministers have been far too timid with a policy that could make a significant contribution to cutting emissions and boosting energy security.
"Installing renewable technologies will now be a good investment for many homes - but farmers, businesses, communities and others will get little or no extra incentive to invest in clean electricity.
"There is huge public support for small-scale green energy schemes. The Government must do much more to tap into this enthusiasm and ensure that everyone plays their part in developing a safer, cleaner future."
Last week a YouGov survey for Friends of the Earth, the Renewable Energy Association and the Co-operative Group revealed that two thirds of the population think that Government feed in tariff plans are not ambitious enough, and 71 per cent of homeowners said they would consider installing green energy systems if they were paid enough cash.
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