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Four reasons the renewable energy grants system is failing

Posted by Cathy Debenham on 22 January 2010 at 9:31 am

The Low Carbon Building Programme started out with worthy goals for domestic microgeneration. Sadly it is failing to achieve most of them, according to research from the Environmental Change Institute at Oxford University1.

Goal 1: support a more holistic approach to reducing carbon emissions by combining energy efficiency and microgeneration installations in the same development.

While it does require applicants to have insulated their house and installed low energy lightbulbs before they can get a grant, this is only the first step. Researchers Noah Bergman and Christian Jardine found no sign of installers considering the house as a whole system and installing the most appropriate technology. Indeed, they found that few installers offer more than one technology and there is a lack of holistic specialist advice available to consumers. This means homeowners are forced to evaluate and choose between different technologies and make decisions they are unqualified to take.

Goal 2: See microgeneration demonstrated on a wider scale.

There was not a great increase in the scale of the domestic market for most technologies in the period analysed, so the researchers conclude that it is “hard to say whether the new domestic installations constitute ‘widespread demonstration’.”

Goal 3: To measure trends in costs, with the expectation that they will reduce over the lifetime of the programme.

While solar electricity (PV) has come down in price over the period and wood-fuelled boiler prices may have reduced slightly, solar hot water (thermal), wind turbines and heat pumps have all stayed the same. The authors conclude that the LCBP programme is not large enough to change the market.

Goal 4: To raise awareness of microgeneration, develop skills and change consumer attitudes and behaviour by communicating its potential.

While the study didn’t measure behaviour change the report points out: “It is not clear how the installations are meant to change attitudes, with no clear onus on installers for information provision, let alone whole system thinking."

Overall: "The fundamental problem was a fixed grant pot, which was too small to subsidise the growing level of installations. The only options were increasing the overall size of the pot or reducing maximum individual grants. The latter was chosen, and unfortunately, this had the opposite of the desired effect, reducing the number and size of installations.”

While not a surprise, these findings are still depressing. Let's hope that the Government has learned from them, and the eagerly awaited feed-in tariff is both more ambitious and successful in making microgeneration widely available. (Details of the final FiT scheme are expected to be announced in the next week or two).

1Power from the People, analyses data for grants awarded in the first two years of phase 1a of the LCBP scheme from May 2006 to May 2008.


If you have a question about anything in the above blog, please ask it in the comments section below.

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1 comments - read them below or add one


HeatandEnergy.OrgComment left on: 23 January 2010 at 8:23 pm

Very intersting cathy.

Perhaps a scheme whereby installers would become liable for mis-selling or selling the wrong technology would be appropriate, something similar to the FSA  when selling financial services. The same should apply should an installer move ahead with an insatllation without have investigated if ther are more efficient measures that could be taken like sealing and iinsulating the property envelope.

With reference to the grants, subsidies and technology prices I recently wrote an article concerning these issues in responce initially to the @Pay as you save' scheme. Here's a snippet of my thoughts:  (read it here)

The manufacturers and suppliers of these technologies need to re-align their thinking slightly, and perhaps reinvent themselves as energy providers as opposed to distributors. Wouldn’t it be better to pay them your monthly household budget for clean and renewable energy. Alternatively, create a lease/purchase scheme, lots of people cars, this would eradicate fears of purchasing inferior or inefficient equipment and so drive micro –generation to mainstream markets.

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