| Posted on October 28, 2011 at 11:45 AM |
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The renewables industry in the UK is currently seeing a stampede for installations of energy systems eligible for Feed In Tariff payments.
The Tariff or FIT supports renewable systems by providing a payment per kilowatt of ‘green’ electricity generated. For example, after a recent Government review, the subsidy for a solar photovoltaic system that is retrofitted to a house is 43.3p/kWh. This is coupled with an award for the export of electricity back to the grid as well. This applies to the life of the system and can generate considerable income to the system owner.
The full Feed In Tariff Support list is as follows:
Anaerobic digestion ≤250kW 14.0 20
Anaerobic digestion >250kW - 500kW 13.0 20
Anaerobic digestion >500kW 9.4 20
Hydro ≤15 kW 20.9 20
Hydro >15 - 100kW 18.7 20
Hydro >100kW - 2MW 11.5 20
Hydro >2MW - 5MW 4.7 20
Micro-CHP [B] <2 kW 10.5 10
Solar PV ≤4 kW new [C] 37.8 25
Solar PV ≤4 kW retrofit[C] 43.3 25
Solar PV >4-10kW 37.8 25
Solar PV >10 - 50kW 32.9 25
Solar PV >50 - 150kW 19.0 25
Solar PV >150 - 250kW 15.0 25
Solar PV >250kW - 5MW 8.5 25
Solar PV Standalone [C] 8.5 25
Wind ≤1.5kW 36.2 20
Wind >1.5 - 15kW 28.0 20
Wind >15 - 100kW 25.3 20
Wind >100 - 500kW 19.7 20
Wind >500kW - 1.5MW 9.9 20
Wind >1.5MW - 5MW 4.7 20
Existing generators transferred from RO 9.4 to 2027
Notes:
[A]: These tariffs are index-linked for inflation (see below).
[B]: This tariff is available only for 30,000 micro-CHP installations, subject to a review when 12,000 units have been installed.
[C]: These terms are defined as follows:
“Retrofit” means installed on a building which is already occupied
“New Build” means where installed on a new building before first occupation
“Stand-alone” means not attached to a building and not wired to provide electricity to an occupied building
Once a system has been registered, the tariff levels are guaranteed for the period of the tariff and index-linked. For systems registered in future years, some tariff levels will be adjusted to account for expected reductions in system prices. For householders producing energy mainly for their own use, the tariff income is also free from income tax.
What I do find curious and disappointing is the focus on the income generation element of the FITs. The Feed In Tariff is not intended to be an income-generating scheme, it is intended to help drive down the cost of renewable energy systems to help make them competitive with traditional fossil-fuel based systems. This is why the scheme sees the contribution be higher for earlier adopters (i.e. now) as compared to later in the scheme’s currently planned lifespan.
By getting more, immediate installations, the cost of the equipment, installation and utilisation will fall through natural supply and demand and the channels of creation, supply and delivery will be developed more rapidly. The carbon argument also gets overlooked with very few recognising the significant savings that will result from the replacement of the fossil-fuel based systems with renewable ones.
Sadly in these challenging of economic times the FIT is seen as a potential revenue stream rather than a driver for change. However, if the economic factor helps achieve its aims indirectly then this at least will see it succeed, it is just concerning that so many see the FIT for its cash potential rather than change potential.