Archive for February, 2010

Green Web Award Winner

Monday, February 15th, 2010

YouGen has been voted winner of the green living advice category of the Green Web Awards. The website, which aims to make it easy for people to work out whether or not renewable energy is a appropriate for their house, had been up for less than a year when it was shortlisted.

“To be publicly recognised like this is a huge boost,” said Cathy Debenham, founder of YouGen. “I’d like to thank everyone who voted for us.” It was a nail-biting contest, as we were shortlised against two really good websites: The Guardian’s Ethical Living site, and My Zero Waste. It is a real honour to win.”

The Government’s announcement of financial incentives for people who want to install microgeneration technologies last week, makes websites like YouGen even more vital. “The Clean Energy Cashback (feed-in tariff) makes it likely that more and more people will be tempted to install solar panels or other types of renewable energy,” says Cathy. “More installers will enter the market too, making it harder to identify the good ones. This is where YouGen differs from most renewable energy websites – helping people find an installer they can trust is at the heart of what we do.”

Research by Oxford University’s Enviromental Change Institute and the Energy Saving Trust has  found that the newness of the market makes it difficult for potential buyers to assess what they are being offered by suppliers. YouGen aims to help people overcome that barrier.

We provide practical, down to earth information, in plain English,” adds Cathy. “This means that people have a good understanding of what to ask an installer. They can search for local companies on the site, and we encourage existing microgenerators to rate their supplier under five different criteria, to make it easy for others to choose an installer they can trust to do a good job. In a new market it’s often impossible to ask a friend for a recommendation. Getting one from the YouGen community is the next best thing.”

YouGen has also been vocal in championing early adopters of microgeneration whose income from microgeneration will fall when the feed-in tariffs start in April 2010. “They have been treated unfairly,” says Cathy. “These derisory rates throw all their payback calculations out. The pioneers will be left with even longer payback times, while watching those who played safe and waited getting a healthy return on their investment. We have done our best to give them a voice, and get their message heard.”

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Feed-in tariff: your questions answered

Monday, February 8th, 2010

The introduction of the feed-in tariff (known as Clean Energy Cashback scheme) opens a new and exciting era for microgeneration. Here we answer some of the most common questions on the new scheme. If you’ve got any more, please add a comment below and we’ll do our best to answer. The information below refers to domestic installations of less than 50kW. This blog post supplements our main information page on feed-in tariffs which gives all the rates for each technology.

What return on my investment should I expect?
The scheme has been devised to give a 5 to 8% return on investment for “well-sited installations”. Of course, you will only get this good a return if your system performs well, so it is important to measure the wind speed, or solar potential, before going ahead with an installation.

Is it better to export the electricity I produce, or to use it at home?
The aim of the Clean Energy Cashback is to incentivise people to use the electricity they produce at home where possible. The amount you save by not buying electricity from your energy company is significantly more than the sum you get for exporting it. It makes sense to do things that use electricity while your system is generating. So you might do the vacuuming or run the washing machine during the day if you’ve got solar panels, or when the wind is blowing if you’ve got a turbine. The government hopes that by generating your own electricity you will develop a better understanding of energy and become a more efficient electricity user.

Do I have to make my house more energy efficient to qualify for the scheme?
There are no mandatory requirements to do so, but it makes sense to increase the energy efficiency first, as it is generally a more cost effective way of reducing energy bills and carbon pollution. The expectation is that by installing a microgeneration system you will get a much better understanding of how you use electricity, and that will lead to a reduction in your total use. The system is structured to encourage that too – the less you use, the more you can export and earn income on.

What happens if I move house?
With the average family moving house every 7 years or so, and the life of the feed-in tariff at 20 years (10 for CHP, 25 for solar panels), this will happen to a lot of people. The government expects standard property ownership rights to apply to the generating equipment. This means that when a house is sold, the generating equipment and the FiT payment are sold too, and the system administrator must be told of the sale. They expect that the market will decide how much a microgeneration installation will increase the price of a house.

Can I take my solar panels or wind turbine with me, and still claim the Clean Energy Cashback?
No. The scheme is only available on installation of new systems, by an an MCS accredited installer. If you took your equipment with you, reinstalling it would count as a second hand installation, and not be eligible for the Cashback.

Will there be loans available to help with the upfront costs of installing microgeneration equipment?
Although the government is currently piloting five Pay as You Save schemes, it has no plans to introduce “a mechanism for up-front capitalisation of FiT revenues”. It says: “We hope the market will provide the necessary loans or other finance packages to drive the uptake of small-scale technologies”. However, it is possible for owners of generating systems to assign their rights to feed-in tariff payments to others. This is expected to pave the way for a range of ways of financing microgeneration in social housing and new build, and may form the basis of a new type of loans for homeowners.

Am I eligible for the feed-in tariff if I install my own system?
No. To claim FiTs you must use an MCS accredited installer and install MCS accredited products.

Will I have to pay tax on the income I get from the Clean Energy Cashback?
Income for domestic properties generating electricity mainly for their own use will not be taxable income for the purposes of income tax.

Are the payments inflation proof?
Both the generation and the export tariffs will rise annually in line with the retail price index.

How long will I receive the tariff payments for?
25 years if you have photovoltaic (solar) panels; 20 years for hydro, wind and anaerobic digestion; and 10 years for micro-CHP. If you installed your system before 15 July 2009 you will receive payments until 2027.

I’ve heard that the rates “degress” over time. What does this mean?
The theory is that as the market for microgeneration grows the prices of the equipment and installation are expected to go down. As this happens there will be less need for such a large financial incentive and so the rates of the Clean Energy Cashback will go down. Degression is where tariffs for new installations are set at a lower level each year, than they were the previous year. The rate you receive at installation then stays the same for the whole life of the tariff (with annual adjustments in line with the retail price index). Degression will not start until April 2012.

What happens if I add to the capacity of my renewable energy installation?
If you have two different technologies on the same site (ie wind turbines and solar panels) they will be classed as different installations. Multiple installations of the same technology at the same site will be classed as a single installation. Similarly, if you add to an existing installation of the same technology within 12 months it will be treated as an increase in capacity of the same installation.
If you add to a system more than a year after the first part was registered in the Central FiTs Register, it will count as a new station.

I installed my system before the Feed-in Tariff proposals were announced. Am I eligible?
If your system was installed before 15 July 2009, and is accredited under the Renewable Obligation (RO), then you will be automatically transferred onto the Clean Energy Cashback in April 2010 (albeit at the lower 9p generation rate). If you are not accredited under the RO, then you must get accreditation before 31 March 2010 to be eligible. You will continue to receive this support until 2027.

Can I claim the Clean Energy Cashback if I install a refurbished or second-hand system?
No. The reasoning behind this is that the scheme is intended to encourage new entrants into the market, and has been designed on the basis of cost assumptions for new equipment. However, the government aims to keep this under review, and will “consider whether or not there are merits to allowing renovated or refurbished technologies to receive FiTs support in the future, bearing in mind the different cost and the fact that equipment may have received other financial support through its life”.

What is the MCS?
The Microgeneration Certification Scheme is an independent, industry-led, certification scheme for both installers and products. It is accredited by the United Kingdom Accreditation Service (UKAS) and is adminstered by Gemserv.

Can I opt out of the export tariff and sell my electricity on the market?
If you feel up to dealing with the risks of the electricity market you can choose to out of the export tariff. If it doesn’t work for you, you can opt back in – but can only make the change once a year.

Why is the case different for micro-CHP?
This is a new technology, which has the potential in the long run to take over from condensing gas boilers. It is being included in the Clean Energy Cashback scheme as a pilot to provide initial support for the new industry. It is limited to the first 30,000 units (with an electrical capacity of 2kW or less), and will be reviewed after the first 12,000 installations. Recipients of the Clean Energy Cashback for micro-CHP will receive it for 10 years.

Will off-grid generators qualify for feed-in tariffs?
Yes, you will receive the generation tariff. To do so, you will have to declare that the electricity generated has been used, and must comply with the scheme requirements in relation to metering. You can approach any of the mandatory FiT suppliers (ie the big electricity companies) and they will be obliged to provide your Clean Energy Cashback payments. Voluntary FiT suppliers (ie the smaller energy companies) may also agree to provide FiT payments to off-grid generators.
Eligibility for off-grid remote communities will be considered at future reviews of the scheme.

Which suppliers can I export my electricity to?
All suppliers with a minimum of 50,000 customers will be obliged to accept microgeneration customers. They are described as mandatory suppliers. Smaller specialist suppliers can.

First published on YouGen

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Cash Back for Green Energy

Tuesday, February 2nd, 2010

At last the uncertainty is over – we now know what the rates are for the Clean Energy Cashback (feed-in tariff) which starts on 1 April 2010. Its purpose is to encourage installations of wind turbines, solar photovoltaic panels, micro hydro and microCHP schemes of up to 5MW capacity to produce low carbon electricity.

The feed-in tariff aims to provide an incentive for people to invest in microgeneration and expects to deliver a return of 5-8% for well-sited installations. It will consist of three elements:

  • A fixed payment from your electricity supplier for every kilowatt hour (kWh) your system generates. This is called the generation tariff. See below for rates.
  • A guaranteed price for any surplus electricity that you do not use on site, and export to the grid. This is called the export tariff and will also be paid by your electricity supplier. It has been set at 3p per kWh.
  • In addition, as you use electricity generated on site you will need less from the national grid – so your bills will be lower.

Unlike the export tariff (which at 3p per kW is less that the 5p consulted on) the generation tariff rates have increased since the consultation document was issued last year. For the first two years of feed-in tariffs (April 2010 – March 2012) they will be as follows:

Hydro:
19.9p for installations up to 15kW;
17.8p for 15-100kW;
11p for 100kW-2MW;
4.5p for 2-5MW,
Paid for 20 years

Solar photovoltaic panels:
41.3p for installations of less than 4kW retrofitted onto an existing building (36.1p if it is on new build);
36.1p for 4-10kW;
31.4p for 10-100kW;
29.3p for 100kW-5MW and for stand alone systems
It will be paid at these rates for 25 years.

Wind:
34.5p for installations with a capacity of less than 1.5kW;
26.7p for 1.5-15kW;
24.1p for 15-100kW;
18.8p for 100-500kW;
9.4p for 500kW-1.5MW;
4.5p for 1.5-5MW
Paid for 20 years.

MicroCHP pilot:
10p per kW for micro combined heat and power installations. This will support up to 30,000 installations and will be reviewed when the 12,000th system has been installed. It will be paid for 10 years.

Existing microgenerators (under 50kW) who installed their system and were accredited under the Renewables Obligation before 15 July 2009 will automatically be transferred to the feed-in tariff at a generation rate of 9p per kWh, regardless of technology. This will be paid until 31 March 2027.

Microgenerators who installed pre 15 July 2009 and are not accredited under the RO will not be eligible for feed-in tariffs.

Inflation: Both the generation tariff and the export tariff will be indexed to the retail price index.

Tax: In the 2009 Pre-Budget Report the Chancellor confirmed that households which use renewable technology to generate electricity mainly for their own use will not be subject to income tax on feed-in tariffs.

The rates above are for those installing their system between 15 July 2009 and 31 March 2012. You will remain on that rate (plus inflationary rises) for the life of the tariff. From 1 April the rate that new generators get will begin to reduce (“degress”) to reflect (and to some extent encourage) expected decreases in technology costs.

People who install any of the above systems before April 2010 are still be eligible for government grants such as the low carbon buildings programme (subject to funds lasting until then). You will automatically be transferred to the feed-in tariff once it comes in.

Full details of the Government response to the FiTs consultation can be downloaded from the DECC website. This first appeared on YouGen.

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