| Posted on August 2, 2011 at 11:15 AM | 
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The Feed-in-Tariff is the UK’s subsidy system designed to help drive the uptake of smaller-scale renewable energy technology across the country. The approach has been taken from elsewhere in the world where it has been successfully implemented.
The tariff provides revenue based on a price per kilowatt hour generated and an additional subsidy for unused electricity exported back to the national grid is paid as well. The tariff operates on a time-limited sliding scale where it will reduce in contribution down to a set target level by a certain date in the future. The intention being to see the higher subsidies on offer earlier in the scheme help drive system installations, thereby increasing demand in the marketplace and reduced overall system and installation costs and see a communal benefit result.
The ultimate aim of FITs is to see the cost of renewable energy systems come down to such a point where they compete with traditional energy systems such as those based on fossil fuel. There has been a recent flurry of activity to get installations completed ahead of the first drop in subsidy but despite the honourable intentions of the scheme the ultimate aim of the subsidy is often overlooked with many choosing to focus on the financial implications (especially the pure revenue yields) rather than the long-term aim. This selfish short-termism is quite worrying…
The UK Government recently chose to alter the scheme to ensure greater parity for all, enabling more people to benefit and this left some larger scale solar farm developers looking at much smaller contributions. Despite some outcry surely it is right that the FIT subsidy is spread equitably across the entire country and across a variety of technologies rather than just solar in one particular area? Only by taking a holistic approach can we ensure that the impact of climate change and energy security can be minimised.
The tariff provides revenue based on a price per kilowatt hour generated and an additional subsidy for unused electricity exported back to the national grid is paid as well. The tariff operates on a time-limited sliding scale where it will reduce in contribution down to a set target level by a certain date in the future. The intention being to see the higher subsidies on offer earlier in the scheme help drive system installations, thereby increasing demand in the marketplace and reduced overall system and installation costs and see a communal benefit result.
The ultimate aim of FITs is to see the cost of renewable energy systems come down to such a point where they compete with traditional energy systems such as those based on fossil fuel. There has been a recent flurry of activity to get installations completed ahead of the first drop in subsidy but despite the honourable intentions of the scheme the ultimate aim of the subsidy is often overlooked with many choosing to focus on the financial implications (especially the pure revenue yields) rather than the long-term aim. This selfish short-termism is quite worrying…
The UK Government recently chose to alter the scheme to ensure greater parity for all, enabling more people to benefit and this left some larger scale solar farm developers looking at much smaller contributions. Despite some outcry surely it is right that the FIT subsidy is spread equitably across the entire country and across a variety of technologies rather than just solar in one particular area? Only by taking a holistic approach can we ensure that the impact of climate change and energy security can be minimised.
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