Feed in Tariffs
Feed in Tariffs were enabled in UK legislation in November 2008 in the Energy Act. The details were published in the Renewable Energy Strategy in July 2009. These details cover Feed in Tariff Qualitative Design, Feed in Tariff Quantitative Design, and Feed in Tariff Financial Incentives. They will come into force in April 2010. These feed in tariffs have already be introduced in most European Countries and www.feed-in-tariff.org is dedicated to explaining what is happening in other countries so that British people can get ready.
To ensure we are all confused, the UK government calls the system "Clean Energy Cash Back". Its the same as Feed in Tariff, but with the usual spin that we've grown to expect from the Government...
What is a Feed in Tariff?
A Feed in Tariff is a long term government backed contact to buy the electricity and "carbon credits" you make onsite from solar panels, wind turbines or other renewable energy systems. Read the Introduction to Feed in Tariffs by the World Future Council
How do solar panels work?
Solar panels turn the sunshine into electricity. These PV panels are different from the ones which make hot water.
How secure is the Feed in Tariff?
Owning a wind turbine or solar panels with a Feed in Tariff contract is like owning a commercial office and renting it to the Government on a 20-25 year lease. It doesn't get much more secure than that.
Can the Government change the payment rates on the Feed in Tariff?
The Governement can't change the payment rates for people who are already contracted in, except that it will increase the payment rates in line with RPI or similar. However, for people who haven't yet contracted in, the value of new contracts struck decreases year by year. That means there is a strong incentive to get involved early.
How much will they pay me for the Feed in Tariff?
That depends on the type of technology you have and the scale of it. Once you have had a site survey, you will know what is feasibile and you should be able to get this nailed down in more detail.
How does it work in other countries?
The Feed in Tariff system has been enacted in some states in Australia, Austria, Brazil, Canada, China, Cyprus, the Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Israel, Italy, the Republic of Korea, Lithuania, Luxembourg, the Netherlands, Portugal, Singapore, Spain, Sweden, Switzerland, and in some states the United States. Read this comparison of the Spanish and German Feed in Tariff System
What happened in other countries?
The Feed in Tariff caused an explosion in the market which created lots of new jobs. The growth of PV installations has been astonishing.
What happens to the electricity I generate?
If you can use the electricity on site then your house, or business will automatically sort this out. If you don't need it, then the system automatically sells it to the grid.
What are carbon credits?
Carbon Credits (some times called Renewable Obligation Certificates or ROCS) are the technical mechanism that makes the Feed in Tariff work through what's known as a cap and trade system. You sell clean electricity to the grid, which generates carbon credits. Polluting companies have to buy these credits. The Government underwrites the minimum price for the combination of electricity and carbon credits.
What sort of rates should I expect for the Feed in Tariff?
Returns of around 15% are very feasible in an average site. That equates to around a 7 year payback. If you have an excellent site, then more than this may be achieveable.
What residual values do these technologies have?
There is a thriving second hand market in wind turbines as many people upgrade to a larger machine at around 10 years. Solar panels come with a 20 year production guarantee and keep producing long after that.
Why do I need a site survey for the Feed in Tariff?
Not all solar panels or wind turbines are suitable in every site, so we recommend you seek advice on the best solutions for your situation.
Why is the Government doing this?
They are years behind the rest of Europe on commitments to reduce carbon dioxide emissions. Feed in tariffs are the fastest way to catch up.
The Governement is also worried as they are going to have to decommission many power stations over the next few years, and they don't want the lights to go out. Again, Feed in Tariffs are a very quick way of getting huge amounts of electricity generation capacity depolyed.
Energy Security is also a concern as North Sea Oil and Gas reserves run down and prices rise.
What is really happening with Climate Change?
There is a lot of rubbish out there on climate change. Here are some of the best more scientific reports.
IPCC - Global outlook for Climate Change
Met Office UK local analysis of Climate Change Impacts
Can I borrow the capital to install wind turbines or solar panels?
Yes. There is an increasingly sophisticated market for finance. Speak to your installer.
What's the catch?
Do your sums carefully and double check all your assumptions. Do you have the wind or solar resource you think? How many weeks per year will your system be unavailable for maintenance? What are your upfront costs going to be?
Do I have enough sunshine for solar panels?
Most of the UK has enough sunshine. Check out this Solar Panel resource map.
Do I have enough wind for a wind turbine?
Most of the UK has enough wind, if you are in an open area. Check out this wind turbine resource map.
Where can I get advice on what solar or wind resource you might have, and which technologies might be most suitable?
Start with trade associations like the BWEA or REA. All their members are listed in thier websites.