U.K. Unveils Higher Feed-in Tariffs

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. government has revealed higher-than-expected feed-in tariffs (FiTs) for solar, wind and small-scale hydropower projects.

The finalised FiTs, published by the Department of Energy and Climate Change (DECC), are designed to encourage small-scale renewable projects up to 5 megawatts (MW) throughout the U.K. From April 1, individuals and communities with small scale electricity generation solutions will be paid for each unit of electricity generated and for any surplus electricity sent to the national grid. The announcement came as DECC also revealed plans for the similar Renewable Heat Incentive (RHI) scheme, something it claims is the world's first scheme to encourage the use of low-carbon heating solutions.

"The guarantee of getting an income on top of saving on energy bills will be an incentive to householders and communities wanting to make the move to low-carbon living," said Energy and Climate Change Secretary Ed Miliband. "The feed-in tariff will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past. It will also change the outlook for a range of industries, in particular those in the business of producing and installing small-scale low-carbon technology."

A typical 2.5-kilowatt (kW) solar photovoltaic installation in a good location could offer a homeowner payback of up to £900 ($1,400) and save £140 ($225) a year on electricity bills. The U.K. currently generates about 5.5% of its electricity from renewable sources, but this will need to increase to about 30% to meet renewable energy targets by 2020. Estimates show that small-scale renewable installations could meet 2% of the country's total electricity demand in 2020.

All of the six eligible renewable bands have been restructured and provide better FiTs than previously expected.

Gaynor Hartnell, policy director of the Renewable Energy Association (London, England), welcomed the new tariffs: "The potential impact on households, businesses, farmers, schools and virtually every other energy user you can think of should not be underestimated. The balance of power has shifted. Instead of being tied to fossil fuels and energy price fluctuations, people and communities can now take control of their energy supply and their energy bills. The next ten years must be the decade of delivery for renewables, and these schemes mean every home and every neighbourhood can get actively involved. Come 2020, we hope installing renewables such as solar panels on roofs or heat pumps in backyards will be as everyday as putting up satellite dishes or installing double-glazing."

The one loser in the new FiT scheme is biomass, which was removed from the list and replaced with MicroCHP. Power from biomass was scheduled to receive 9p ($0.143) per kilowatt-hour (kWh), but now up to 40,000 MicroCHP schemes will receive 10p ($0.16) per kWh. The technical difficulties with implementing biomass were blamed for its omission, although pilot schemes will be monitored until a tariff can be worked out. Biomass projects are still eligible for Renewables Obligation Certificates (ROCs).

IIR's Renewable Energy Database provides extensive coverage on the Wind Energy, Geothermal, Hydroelectric, Landfill Gas-to-Energy and Utility-Scale Solar power plants throughout North America, and is now expanding coverage across the world.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.