Renewable Energy Made Easy

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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