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Homeowners could earn £900 for a solar panel through feed-in tariff

1/2/2010

Government announces tariff levels and consults on renewable heat incentive.

Energy and climate change secretary Ed Miliband has announced feed-in tariff (FITs) levels and  published a consultation for the renewable heat incentive (RHI) to be introduced in April 2011 to incentivise low carbon heating technologies.

From 1 April householders and communities who install low carbon electricity technology such as solar photovoltaic (pv) panels and wind turbines up to 5 megawatts will be paid for the electricity they generate, even if they use it themselves. The level of payment depends on the technology and is linked to inflation.

They will get a further payment for any electricity they feed into the grid. These payments will be in addition to benefiting from reduced bills as they reduce the need to buy electricity. The scheme will also apply to installations commissioned since July 2008 when the policy was announced.

Tariff levels range from 4.5 pence /kWh for some large hydro and wind installations to 41.3 pence/kWh for some photovoltaic installations. A typical 2.5kW well sited solar pv installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.

DECC has also published plans for a scheme to incentivise renewable heat generation at all scales. This will come into effect in April 2011 and guarantee payments for those who install technologies such as ground source heat pumps, biomass boilers and air source heat pumps.

Under the proposed tariffs the installation of a ground source heat pump in an average semi-detached house with adequate insulation levels could be rewarded with £1,000 a year and lead to savings of £200 per year if used instead of heating oil.

Details of funding for the scheme will be published in next Budget.

Ofgem will administer the feed-in tariff scheme and suppliers will be responsible for paying the reward to their customers. Householders and communities can apply for the feed-in tariff from their electricity supplier from April 2010.

Deadline for comments on the consultation on the renewable heat incentive is 26 April.