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Has the purpose of the feed-in tariff changed?

Posted by Cathy Debenham on 23 March 2011 at 12:07 pm

Do you know what the purpose of the feed-in tariff is? I thought that I did. I thought that it was about lowering the country's carbon emissions, to help us meet our EU carbon emission reduction targets. But, apparently not. 

According to Alasdair Grainger, the DECC official speaking at yesterday's Renewable Energy Marketplace in Exeter, that's the purpose of the renewable heat incentive and the renewables obligation. The feed-in tariff is about increasing the number of people involved in the energy debate, by getting them to engage first hand with energy.

Interesting. Was this Labour's purpose I wonder? If so, it wasn't clear in the original consultation document. Or, is it a repositioning of the feed-in tariff by the Coalition, and quite useful in justifying the fast track review? My money's on the latter.

Anyway, on a domestic level, I find it interesting that the technologies that they have chosen to use for people to 'engage with energy' are solar PV and wind. These are undeniably the most visible, so lots of people see them and begin to think of them as the norm (if they aren't objecting about them to the planners). Is this the engagement they mean? Or is it financial? As an owner of one or other, you can definitely watch the meter ratchet up, and the tariff payments roll in.

However, as an owner of microgeneration technology, I reckon you engage less with the electricity generating ones, than you do with the heat generators. I have solar thermal panels and solar PV, and I definitely engage much more with the solar hot water.

When I turn on the kettle I can't tell whether it's home generated or grid supplied electricity coming down the line. When I look at the controller on the hot water cylinder I can see what contribution to the hot water the sun has made, and whether or not I have to turn on the boiler to top it up.

Today, I know that when I get back from my bike ride later, I'll be able to have a purely solar heated shower. I only think that the computer I'm writing this blog on is running off sun. So why on earth is the financial incentive for one set of solar panels for engagement and involvement, and the other for meeting carbon reduction targets?

Surely enagement and involvement are necessary prerequisites on the road to meeting our carbon reduction targets. In which case, why aren't both engagement with energy and meeting the targets the purpose of all the financial incentives? Or is it just to justify chopping the rates for bigger installations of solar?

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Comments

4 comments - read them below or add one

Cathy Debenham

Cathy DebenhamComment left on: 12 April 2011 at 2:28 pm

Yes, like Horkesman, I'm in favour of small is beautiful too. I was surprised to read last week that some of the cabinet are fans of Schumacher too

As to your points BEAT, I think that the reason PV is the main focus of FiTs is more about its accessibility, than anything else. Most people don't have a site suitable for a wind turbine or a hydro scheme, but a lot do have a south facing roof. What I find exciting is that the prices for PV are dropping fast - although I think it's more about world markets than it is about the feed-in tariff!

I agree with your points about public sector invesment, but there are some really exciting locally-based community programmes going on all over the country, with some really creative ideas for how to get the funding necessary. Watch the blog for case studies coming up soon.

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beat-n-a

BEATComment left on: 1 April 2011 at 4:27 pm

The purpose of the FIT seems to be to take money of everyone, and give it back to the wealthy.  An average person (or community group or church) cannot afford £13k - £30k on a solar system.  They frankly dont have the cash.  Therefore, those with the cash can rub their hands in capitalist glee, and reap the benefits of everyone elses money.

If solely about carbon, it would be more simple to take everyones money and invest it into government (public owned) projects which benefit everyone, rather than the rich.  This would also be cheaper (without the paperwork and numerous organisations involved in setting up and managing the FIT).

Unlike the posts above, I cannot afford a solar system.  If I could afford such a system, financially it makes great sense for PV - however it is a shame that PV is the main focal point of the FIT, givens its relatively poor performance on environmental credentials (and payback if you dont include the FIT) compared to other systems.

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horkesman

horkesmanComment left on: 31 March 2011 at 5:48 pm

I thought FIT was created in recognition of the likelihood that the energy companies were unlikely to be able to make sufficient investment in large-scale renewable generation in the timescale required.  So instead of fully-funding their own capital programme, they pay microgenerators with suitable roofs and a bit of spare capital to do part of the job for them.  So it is a way of helping the energy companies to meet their renewables obligation.

I'm sure the appearance of roofs covered with solar arrays makes it a talking point too, whilst the generous tariff in the first two years ensures that plenty of new small businesses can be supported. It even gives a better rate of return than an ISA.  All round great idea.

However, it's not so good (because it doesn't encourage ordinary people to spend their savings to produce long-term guaranteed income) if the capacity is taken up by bigger investors like local authorities.  They don't tender to small businesses for this sort of work and they use capital that would otherwise have been spent elsewhere in the economy, so there's no overall gain. Hence the fast track review to refocus the scheme on the domestic market.

Back to small is beautiful, in fact. Schumacher rules!

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Chris W

Chris WComment left on: 23 March 2011 at 5:24 pm

I must think differently to you ;-) I'm typing away at my computer but with an Efergy meter beside me, I can see that the output from the PVs is dropping as the sun goes down. I look more at the Efergy meter than I do at the temperatures on the solar controller, partly because of positioning. Like you though, I went out for a bike ride this morning and came back to a solar-heated shower. I washed my car this afternoon with solar-heated water. I figured that as the heat was free and I would be paying the same amount for the water, why not use hot water?

Out of the two technologies, I would recommend people go for PV rather than solar thermal. Even on a grey day, PVs do something whereas solar thermal doesn't. So on balance, I'd say I engage more with PV. Certainly my neighbours engage more with PV. One of them came up to me while I was washing my car, rubbing his hands saying 'More money for the electricity'. I couldn't agree more.

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