Other countries have had them for years, we’ve campaigned on it, and now it’s arrived: Britain finally has a feed-in tariff. From April 1st, households and communities installing micro-generating solar panels or wind turbines will be able to claim higher prices for any energy they create.
Energy Secretary Ed Milliband announced the measure today. “The feed-in tariff will change the way householders and communities think about their future energy needs,” he said, “making the payback for investment far shorter than in the past.”
A feed-in tariff is essentially a subsidised price for renewable energy. By guaranteeing a higher price for green electricity, people are able to invest in solar panels knowing that they will at least make their money back, or even make a profit. Without a feed-in tariff, solar panels do not pay for themselves before they wear out and are usually a net loss, meaning only wealthy ecologically minded house-owners could install them.
As more people are able to invest in micro-generation, demand will rise, and more companies will enter the market. This creates competition which in turn lowers prices, creating a virtuous circle that will drive the development of green energy.
Milliband also announced a feed-in tariff for sustainable heat generation today, apparently a world first. Starting in 2011, those using ground source heat pumps or solar thermal would also be able to claim payments, which are funded through a small levy on energy bills.
Campaigners have welcomed the move, although they had hoped for a more generous package. “Ministers have been far too timid,” says Dave Timms from Friends of the Earth. “There is huge public support for small-scale green energy schemes. The Government must do much more to tap into this enthusiasm and ensure that everyone plays their part in developing a safer, cleaner future.”
the main questions still remains. does this incentive equate the cost of alternative energy to the cost of energy generated by fossil fuels? or will the benefits of the feed-in-tariff still take years to be realized?
I think it’ll be a few years before we really start to see any movement, as it might take a while for the market to respond. The key thing is to guarantee enough of a payback for ordinary people and small businesses to invest. I get the impression the government could have been more ambitious, but I think it should still be enough to give the market a kickstart.
I agree with you on that. Homeowners in the UK have been waiting for some time for this development, so it ought to add a few more people to the relatively small list of people using solar energy to power their homes.