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Posts tagged with: microgeneration

In a bid to prevent a shortfall in rate payments for pioneers in small scale renewable energy investment, Good Energy has promised to continue to pay its generators 15p /kWh rather than the 9p / kWh set out in the recently announced tariff legislation.

Good Energy, dealing solely in renewable energy has announced that the government’s recent tariff scheme would harm their so-called ‘pioneer’ generators who installed their renewable technology before the cut-off date of July 15, 2009. Under the new tariff regime to come into effect in the Spring of this year, these pre -July 15 customers would only be eligible for a 9p/kWh payment for units of renewable energy compared to a payment of 41.3p/ kWh for installations after this date.

In a bid to keep pioneer installors viable until when they hope the government will amend their pre July 15, 2009 rule, Good Energy will continue to pay these generators the previous 15p/kWh rate. Currently, Good Energy sees itself as a market leader in renewable energy uptake incentivisation and wants to continue awarding attractive incentives for smale scale installors of renewable energy technology. Leading the way in 2004 with their renewable energy incentive scheme HomeGen, Good Energy believe that the government’s scheme is treating long term micro-generators unfairly.

CEO of Good Energy, Juliet Davenport, announced:

“It’s outrageous that the new FiT only pays the highest reward to new generators – Good Energy believes that the early adopters of microgeneration technology should also be recognised for their pioneering attitude and taking a lead.

That’s why we’ve decided to continue paying our existing accredited HomeGen generators 15p a unit for all the electricity they generate and lobby to change the government’s mind.

It’s outrageous that the new FiT only pays the highest reward to new generators – Good Energy believes that the early adopters of microgeneration technology should also be recognised for their pioneering attitude and taking a lead. That’s why we’ve decided to continue paying our existing accredited HomeGen generators 15p a unit for all the electricity they generate and lobby to change the government’s mind.”

The UK feed-in-tariff announcement has generated a lot of interest in solar energy for homeowners. But what of the interest for organisations such as farms, businesses or local communities?

Some in the press have criticised the government’s proposed feed in tariff plans because they do not offer specific incentives to businesses as well as private individuals.

I would argue that the feed in tariff as it stands applies equally well to enterprises as it does homeowners. Businesses are often able to think longer term about investments. The incentives for installations above 50kW are still attractive for commercial roofspaces, especially if businesses use the electricity they generate for themselves, meaning that installing solar would be a prudent investment to have on a balance sheet. That is not to mention the kudos that comes with being a net exporter of green electricity.

In Germany the commercial rooftop segment of the market is the largest by volume, and with a feed in tariff pricing that now looks rather similar to the UK’s. We may therefore expect that companies start to explore using their roof space for PV. In fact if they haven’t thought of it yet, someone else will soon be approaching them with an offer.

That’s not to say the governments plans are flawless however. The UK is still pitifully behind the rest of Europe when it comes to renewable energy generation and particularly microgeneration.

Still lurking in government policy the ridiculously low target of 2 percent of energy coming from microgeneration by 2020. This is incomprehensible given that Germany is already at 4 percent from solar and other countries like Denmark with biomass gain nearly 40 percent from microgen. Surely this target must be revised!

Speaking as a professional in the global solar industry, the new UK feed in tariff has put us on the radar (a bit). Rather than smirking when I mention the potential for solar in the UK, my colleagues are now starting to take some interest…

After the long wait we finally know for sure the amount to be paid to producers of solar electricity under the clean energy cash back scheme. The result of a consultation process lasting 6 months, the initial outlook for solar energy in the UK is positive.

In comparison with the provisional figures released last year, there has been an across the board increase in the generation tariff paid per kWh for all sizes of installations. The table below shows the feed in tariff as they stand now;

Installation Size

Price paid for energy generated (p/kWh)

Lifetime

Year 1

Year 2

Year 3

4kW (new build)

36.1

36.1

33

25

4KW (retrofit)

41.3

41.3

37.8

25

4-10kW

36.1

36.1

33

25

10-100kW

31.4

31.4

28.7

25

100kW-5MW

29.3

29.3

26.8

25

Stand alone systems

29.3

29.3

26.8

25

There some important new features of the arrangement;

-         The export tariff (the amount paid when energy is fed into the grid) is reduced to 3p/kWh. This will increase the motivation for generators to use the energy for themselves since retail electricity prices are normally significantly more than 3p/kWh.

-         The lifetime of the FIT is 25 years. This is in line with other feed in tariffs around Europe and increases the attractiveness of solar (compared with 20 years) as it increases the security of the investment.

-         The feed in tariffs are linked to inflation. This means payments will increase over time in absolute terms. This is something that we had been campaigning for as ‘inflation risk’ is a significant worry that we have encountered in prospective solar producers.

-         The feed in tariffs can be legally assigned to any party. This allows room for innovative leasing models that are popular in Europe and the US where the either a third party leases roof space or a home owner leases the solar panels system.

Our initial calculations show that this level of tariff should result in 7-8% annual returns for homeowners retrofitting PV systems under 4kW. This means solar will compete with the best investment funds out there for investors pounds.

For Solarfeedintariff.co.uk this announcement represents a positive move by the government. It shows that during the consultation process it has listened to voices in the solar industry (hopefully including ours) and taken note of what is happening in the rest of Europe. Germany has shown that microgeneration, in particular solar PV generation can contribute very significant amounts of the nation’s energy and that a feed-in-tariff is the best way to encourage this growth.

Claims that have recently been made in the press that solar panels are merely ‘eco-bling,’ exhibit complete ignorance of what is happening in the rest of the world. Unfortunately this is a common attitude in the UK, the last major European economy to implement a feed-in-tariff. Hopefully, now with the tariff announced, this will change. We fully expect strong growth in the UK solar industry. This is a good day for Britain and our hopes of achieving our emissions targets.

Stay tuned for more updates.