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UK’s renewable energy incentives with Feed In Tariffs

How feed in tariffs could ‘democratise’ renewable energy generation,  Engineer Live, 18 May 2010, Suddenly, the rewards for generating electricity from low carbon sources are within the reach of far more people than ever before. The financial incentives to encourage the generation of renewable energy, both for use and for export back to the grid, are starting to look very attractive. There’s a viable range of small scale domestic options such as solar PV and small wind turbines, as well as larger technologies which will be more attractive to industrial and other users. Commercial developers and utility companies are starting to take an active interest. Community projects that previously might have struggled to raise capital should now find it easier to get funding from the banks because of the higher returns available. The profitability of on farm or private estate projects will also be vastly improved.
So what’s brought about this very welcome ‘democratisation’ of small and medium scale renewable energy development? The answer is the Feed in Tariff (FiT). One of two new energy policy mechanisms announced by the UK Government in February 2010, the FiT came into force on 1st April as part of the Low Carbon Transition Plan to meet the targets of the Climate Change Act, respond to Copenhagen commitments, reduce carbon emissions and stimulate growth in low carbon electricity.

One of the key aspects of FiT is that the financial support for small scale renewable energy generation is twofold, in that people producing green electricity receive a generation tariff (paid by an electricity company) for everything they generate plus an export tariff for everything they feed back to the grid. In the case of small scale solar PV, for example, the generation tariff is as high as 41.3p/kWh and the export tariff 3p/kWh – so the rewards of self-sufficiency and reduced reliance on the grid are very clear. While the export tariff is fixed, the generation tariff for other forms of renewable energy (up to 5 MW) varies according to the type and scale of the technology that’s installed.

How Feed In Tariffs Could – Engineer Live, For Engineers, By Engineers

May 19, 2010 - Posted by Christina Macpherson | renewable, UK | depleted, energy efficiency, renewable energy, renewables, solar, wind