Energy Tariffs

Latest Feed in Tariff and Renewable Heat Incentive Information

The Government announced on February 1 2010, the finalised rates for the new Feed in Tariff scheme for renewable electricity generation. These rates, detailed below will be paid to individuals and businesses with renewable energy installations in place from April 2010.

The tariffs are designed to last for 20 – 25 years depending on technology and installers will receive the same tariff rate throughout the life of their equipment, depending on in which year of the scheme they joined. For example, an installation in Year 1 will receive the Year 1 tariff for its lifetime, an installation in year 2 will receive the year 2 tariff for its lifetime, etc (though the tariffs will vary each year with indexation).

Finalised Feed In Tariff Rates:

Notable highlights in these finalised tariffs are the rates for small PV and wind. The payment for PV installations less than 4kW in size has risen from a proposed 36.5p/kWh to 41.3p/kWh.

The small wind rates for turbines in the region of 1.5-15kW is also a surprise with an increase from an expected 23p/kWh to 26.7p/kWh.

The tariffs listed above are the total generation tariff which all installers will receive for using their electricity on site. If you cannot use all of the electricity which you produce, you will be able to export this to the National Grid and receive an additional payment 3p/kWh for every unit exported on top of the generation tariff. This export figure was previously proposed at 5p/kWh but has been reduced after some pressure from electricity suppliers. A new addition to the scheme is the ability of installers to opt in or out of receiving the FIT export rate each year and take the chance or selling their excess electricity on the open market. This may prove a useful tool once the scheme is established and payments for green electricity supplied by the National Grid improve.

Those people or businesses wishing to export electricity will eventually require an import/export meter to record the totals exported but as a short term solution, DECC have stated “We have also decided that, strictly as an interim measure, for domestic scale generators, it will be possible to pay export tariffs on the basis of estimated (deemed) exports.“
We will add further details of the metering requirements once we have read further into the documentation.

Based on the above tariff rates, what is the economic investment case for installing a small wind turbine and solar PV system on my farm?
From our calculations, we believe the simple payback of a farm scale 11kW turbine to be just over 5 years with a return of investment of between 18 and 22%. Similarly, a 3kW PV array should provide a return of investment of around 8%.

The above figures are not including any grants or other interest free loan mechanisms which may be available to land based businesses.

If I install the 11kW wind turbine and the 3kW PV array, will I get FIT payments on both installations?
Yes, different technologies installed on the same generation site will receive payments.

What about two wind turbines installed on the same farm?
No, if two or more installations of the same technology are present on one site, the total generation capacity will deem the feed in tariff awarded. Ie, if two Gaia 11kW wind turbines to be installed, the total generation capacity would be 22kW and therefore would receive the FIT of 24.1p/kWh instead of 26.7p/kWh.

What if I installed my PV array before 14 July 2009?
If you have registered your installation for the Renewables Obligation (RO) before the 15 July 2009, then you will be transferred to the FIT scheme but will only receive a set rate of 9p/kWh.

Unfortunately if you installed your solar panels or other technology before July 2009 and did not register for the RO, the DECC have decided that you will not be able to receive any FIT.

Renewable Heat Incentive Rates
The DECC have launched consultation on the Renewable Heat Incentive (RHI) and have set out some proposed rates for the types of technologies and size of installations that they propose to export.

Details are still emerging as to how this scheme will be administered and run but first indications show that small and medium installations will be paid according to a “deemed” heat load of the space they are heating and large installations are likely to require a heat meter to record kWh of heat produced.

We will bring further details of the incentive in due course.

Disclaimer: This information has bee produced from our interpretation of data released by the DECC today (01/02/10). We have used our best endeavours to ensure the data provided is correct but due to interpretation we cannot be held responsible for any inaccuracies that may occur.