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Feed-in tariff is proving a big success

Posted by David Hunt on 15 November 2010 at 9:01 am

The government's feed-in tariff scheme has already got thousands of people generating their own electricity. When it launched the feed-in tariff scheme in April it was one of a range of policies aimed at inducing people to improve the energy efficiency of their homes. Now, just five months later, an Ofgem report has revealed that almost 10,000 people have signed up to the scheme.

Explained simply, the feed-in tariff scheme pays those who generate their own renewable electricity up to 41.3p per Kwh generated, whether they use it or not. You make an energy saving by not having to buy the amount of electricity you have generated yourself, and you get an extra 3p per kWh for the surplus electricity you export to the National Grid.

These payments are made by your energy supplier on a quarterly basis. Some of our customers have already received cheques for over £600 for the last quarter, far exceeding their electricity and gas bills combined. The income from the feed-in tariffs is index-linked, tax free and guaranteed for 25 years for solar panels (20 for wind turbines). It typically provides an 8-10% annual return on investment. Figures from the Ofgem report show that in total, £182,059 has been paid out to UK households through the feed-in tariffs.

The aim of the scheme is to encourage more people to install microgeneration technology, which is capable of producing small amounts of renewable electricity.This will in turn reduce the country's carbon emissions. Looking at the electricity generation in terms of installed capacity, photovoltaic (PV) solar panels are leading the way with 44 per cent of the share. Solar panels also account for a huge 97 per cent of all installations.

Solar PV technology uses cells to convert the sun's rays into electricity, without requiring direct sunlight, which means it continues to generate power even on a cloudy day. According to the National Home Improvement Show, a typical system can add five per cent to a property's value, though there are reasons to suggest this is conservative.

Wind turbines provide the next highest proportion of installed power at 35 per cent. wind turbines are not suited for mounting on domestic buildings or highly urban areas, but work exceptionally well in more rural areas.

It's not just homeowners that are looking to benefit from the feed-in tariff scheme either. Domestic dwellings make up the highest single proportion of installed capacity at 46 per cent, but there are also high numbers of commercial and community projects registered with the scheme.

The installation of a solar PV system is very straightforward; though you must use MCS (Microgeneration Certification Scheme) approved products and installers. Typically our domestic installation teams complete the whole process in less than two days, causing minimal, if any, disruption to your property, most of the installation is outside of you house.

The feed-in tariff is, of course, still in its infancy, but if the success of the similar scheme in Germany is anything to go by, the initiative is only likely to grow in popularity.

About the author: David Hunt was Head of Commercial for Renewable Solutions UK Ltd. He no longer works in the renewable energy sector.

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