A revolution in home energy? (From Smallholder)

A revolution in home energy?

8:00am Saturday 29th May 2010

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he new UK government Feed-in Tariff Scheme, to be introduced in April, will cause a revolution in home energy production and see tens of thousands of homes across Britain become mini power plants.

Up until now installing renewable energy electricity has been an expensive option but Feed-in Tariffs will reduce the time it takes to pay back the cost of a system considerably and allow users to access free electricity at a time of rising electricity prices.

Allan Shepperd from the Centre for Alternative Technology said: “For the first time things like solar power will make economic sense for a large number of householders, property owners, businesses and anyone with a suitable site for solar electricity production.

“For example, if you’re a member of your schools PTA or part of a local group here’s a perfect opportunity to get free electricity for your school or community.

“It will take investment up front but the tariffs guarantees that you can pay the cost off and get free electricity.”

He said that feed-in tariffs have done more than anything else to accelerate the installation of renewable energy capacity in Europe, they essentially are payments to anyone who owns a renewable electricity system, for every kilowatt hour they generate and sell back to the national grid.

Applicable to private and business users generators can expect to earn as much as 41.3p/kWhr, depending on type and size.

The Centre for Alternative Technology is running a free information service for anyone interested in setting up a renewable system and FIT’s www.cat.org.uk/fits.

How does it work?

Generators will be paid for every unit of renewable electricity they produce, whether they use it themselves or sell it to the national grid. Even off-grid homes with no connection to mains electricity will be eligible for FiT income. As our examples illustrate, there are three sources of income/savings under the new scheme: n Generation tariff income for all electricity produced.

n Export tariff income for electricity exported to the grid.

n Electricity bill savings from using your own electricity instead of buying mains electricity.

Who will be eligible?

The scheme will be open for all major forms of renewable electricity generation (photovoltaic solar, wind, hydro, biomass and anaerobic digestion), up to 5,000kW capacity, as long as the scheme was installed since July 2009.

For projects installed before then, there will be only a very low generation tariff if they currently receive money through the Renewables Obligation (RO) scheme – and no FiTs income for those who don’t currently receive RO income.

Will FiTs make a difference?

The FiT scheme only applies to small-scale generators - less than 5MW capacity. Realistically, the bulk of renewable energy in the UK will be produced by large-scale, industrial generators such as wind farms, which are supported through different schemes.

The government’s , very modest, ambition for FiTs is to produce two per cent of the UK’s electricity from small-scale projects.

But while FiTs may not drastically change the UK energy mix, they could make a real difference for individuals and communities who want to take low carbon transition into their own hands.

As our two example calculations show, FiT income makes small-scale renewable energy start to look good not only in ecological but also in financial terms.

Domestic or community scale?

While the FiT scheme is attractive for domestic projects such as a solar photovoltaic (PV) roof on a private home, it is community scale projects that stand to benefit most.

In the right location, wind- or hydro projects in the range between 15 and 500 kW can provide excellent financial returns under FiT (see example calculation).

With price tags between a few £1,000’s and £1,000,0000, such projects are out of reach for most private individuals - and too small for the big power companies.

But they are ideal for local groups to get together, raise the money and make sure that the benefits from local resources such as wind or streams flow directly into the local economy!

How high will the tariffs be?

Tariff levels will be banded by technology and by scale (generation capacity).

For example, electricity from a domestic (below 4kW) photovoltaic roof will receive a subsidy of 41.3 pence per kWh (unit) of electricity, whereas the same amount of electricity from a 500kW wind turbine will receive 18.8p/kWh.

The export tariff will be 3p/kWh for all technologies. Generation tariff payments will be index-linked (i.e. increase with inflation) and guaranteed for 20 years (25 years for PV).

There is an incentive for getting involved as early as possible, as generation tariffs will be lower for schemes installed after April 2010.

Domestic PV A family installs a solar PV array with a maximum output of 2.5 kW on their existing unshaded south-facing roof. (above) The system costs £14,500, this includes a 25 year warranty extension for the inverter unit.

The roof produces around 2,000 kWh of electricity per year. They use 50 per cent of the electricity directly at the time when it is produced and sell the other 50 per cent on to the grid.

Community wind turbine A community group purchases a large (33m rotor diameter, 50m tower) industrial wind turbine with a rated capacity of 330 kW.

Including planning, installation and connection, a new turbine of this type will cost around £700,000. Refurbished turbines are cheaper but not eligible for FiT income.

Installed in an exposed location with strong wind speeds, a turbine of this type can produce 700,000 kWh per year. The tariff for wind power at this scale is 18.8 pence per kWh.

Want to know more?

The Centre for Alternative Technology’s information service provides free and impartial advice. You can visit their FiT information page at www.cat.org.uk/fit/ or contact them on 01654 705989 or info@cat.org.uk to find out more.

Not everyone has welcomed the new feed in tarriff’s with environmental writing guru George Monbiot slamming the whole concept. See next month’s Smallholder for a report on his damming verdict.