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Feed-in tariffs are not fair to renewable energy pioneers

Posted by Cathy Debenham on 14 August 2009 at 9:17 am

Renewable energy pioneers have been dealt a dismal hand by DECC's proposed rates for the feed-in tariff. Existing microgenerators (whose installation has been accredited under the Renewable Obligation) will be automatically transferred to the feed-in tariff on a rate of 9p per kWh (kilowatt hours) of electricity generated.

This sounds miserly in the extreme when compared with the rate someone who installs  photovoltaic (PV) solar panels between now and the introduction of the feed-in tariff in April 2010 will receive. They can apply for a low carbon buildings programme grant of up to £2,500 during the interim and will be paid a 36.5p per kWh 'generation tariff' from 1 April.

An average domestic PV installation in the UK is about 2 kilowatt peak, which will generate about 1,800 kWh in a good location. So that's a £495 a less for the early adopters - or £8,415 of lost income between now and 2027 when their feed-in tariff will end.

The market is never fair to early adopters. Their enthusiasm to get their hands on a new product means they pay higher prices and help the manufacturers discover the bugs in the system so that those who follow on benefit from a better product at a cheaper price.

But this isn't about the market. The government is still paying grants to people who install micro hydro, wind or solar PV in the interim before the feed-in tariff is introduced, specifically to support suppliers and installers who might go out of business if everyone sat on their money until April.
So if it can support the supply side, why can't the government also reward the the early adopters?

Many of them have have had a frustrating time negotiating the ROC system (which is designed for big players in the generation market) just to get paid for the electricity they export. Now they are not going to be treated equally with those who follow.

We're not talking even huge numbers here - in the general scheme of things the cost of including them will be marginal. The Low Carbon Buildings Programme has issued grants to five households for hydro; 1,623 for PV; and 654 for wind.

The disappointment experienced by early adopters is summed up by Colin Dewsnap of Dorset: "It is totally iniquitous for those like me who wanted to do all they could to promote carbon dioxide emissions reduction in a multitude of ways as well as installing solar PV. The government ought to be thankful for people like me, prepared to act in  the national and international interest. Instead of that, we are rewarded with a slap in the face. The more I think about it the more immoral it seems, especially when those who join the club in this interim period will probably be tempted more by the personal economics than national interest."

We're interested to hear what you think. Is it fair? Should the microgeneration pioneers get the same level of feed-in tariff as those who install now? If not, what level would be fair?

Photo by Treveyan


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1 comments - read them below or add one

Chris Rudge

Chris Rudge from Rudge EnergyComment left on: 18 August 2009 at 5:06 pm

From reading the information so far supplied on this issue by the REA, etc, it does look like some veiling has been carried out to make it look like pre 15/7/09 installations will get the new tariff. However, reading more closely, it appears these installations wil be transferred to the FIT scheme..... but at a 9p a unit, just like the existing RO scheme.

I can only suggest we use the consultation period (ending 15th Oct) to attempt to force a change.

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