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Feed-in Tariffs

Category: Essential information September 27th, 2010 by mbc

Whilst I have no immediate plans (or money) to install any electricity generation technology at the barn, I like to keep an eye on future opportunities and thought a review of Feed-in Tariffs may be in order.

The Feed-in Tariff (FIT) scheme has been available through electricity suppliers since April the 1st 2010. The aim of the scheme is to encourage the uptake of small-scale (up to 5MW) low carbon generation technologies through tariff payments made on both generation and export of produced renewable energy. The scheme is designed with the goal of providing a monthly income from your installation that will be greater than your monthly loan repayment to install the equipment (bear in mind this factors in long term loans usually of 20-25 years). It is the large energy companies, (or rather their customers to whom they pass the costs on) rather than any government body that foot the bills for these systems.

The following technologies are eligible for entry to the scheme:

Photovoltaic (PV)
Wind
Hydroelectric
Anaerobic digestion
Micro CHP – this is a pilot programme with 2kW upper limit to generating capacity.

The financial benefits of the scheme come in a number of forms:

The Generation Tariff - you earn a fixed amount for each kilowatt hour of electricity (kWh) you generate and use.
The Export Tariff – you earn an additional fixed amount for every kWh of electricity you generate and sell back to the grid.
Savings made through the reduction in electricity bills.

The exact amount you get paid through the Generation Tariff will vary depending on your specific generation system. For example, a new Solar PV system generating four or less kWh is eligible for a payment of 36.1 pence per kWh, for a medium-large sized wind turbine (>15 – 100kW) the payment is 24.1 pence per kWh. The tariff levels are index-linked for inflation and will be paid for a set period of time – in the case of the examples, 25 years and 20 years respectively. The full table of tariff levels is available from the Energy Savings Trust website in PDF format.

There are plenty of example scenarios with tempting £’s value headlines around the web, I’ll leave it to you to search them out if you’re interested. There are also plenty of online calculators out there to tempt you in and hopefully further inform you – start with the one on energysavingtrust.org.uk, the link is below. But, to summarise what I’ve found, typically for a family home consuming 4-5,000kWh of electricity per year, 2-2.5kW of solar PV panels will generate an income for the householder of upto £1000 per year with around £150 in savings from reduced electricity costs.

Bear in mind that you’ll need to work with a Microgeneration Certification Scheme (MCS) certified installer to be eligible for the scheme.

Futher references:

http://www.ofgem.gov.uk/Sustainability/Environment/fits/Pages/fits.aspx

http://www.energysavingtrust.org.uk/Generate-your-own-energy/Sell-your-own-energy/Feed-in-Tariff-scheme

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