FITs announced
Radical boost to funding for solar and wind energy systems - Sundog Energy welcomes new cashback scheme for renewable energy
Cumbria-based Sundog Energy, one of the UK’s leading providers of solar photovoltaic (PV) and small scale wind energy systems today welcomed the Government’s announcement on Monday on the new Clean Energy Cashback scheme. The new payments will massively increase the amount of money that owners of solar PV and wind energy systems will receive from the clean electricity they generate.
The scheme provides what is known as a feed-in tariff, which is a guaranteed premium payment rate for the electricity generated by renewable generation systems. As of the 1st April 2010, the owners of solar photovoltaic (PV) systems will receive up to 41.3p per unit (kilowatt hour) for all the electricity they generate, even if they use it all themselves. They will also receive a further 3p for each surplus unit that is generated and exported to the national grid, as well as making savings on their electricity bills.
Martin Cotterell, Managing Director of Sundog Energy, said, “The feed-in tariff provides a fantastic opportunity for homeowners, communities and businesses to install solar PV or wind systems and to cash in on the green electricity they generate. Instead of buying power from an electricity company, people will be paid handsomely for generating it themselves and taking real positive action to tackle climate change. April 2010 will radically change the economics of renewable energy, bringing down the time it takes a system to pay for itself, after which it becomes a net earner.”
Payment rates will vary with the size and type of systems. For instance, relatively small solar PV systems that are fitted to an existing property attract the highest rate (41.3p per unit). Larger PV systems (between 4kW and 10kW) and those fitted to new buildings will get 36.1p per unit. Systems of between 10 and 100kW will attract 31.4p per unit, and those between 100kW and 5MW will qualify for payments of 29.3p per unit.
Owners of small scale wind turbine systems (between 1.5 and 15kW) will be paid 26p per unit of electricity generated. Both solar PV and wind energy systems will also gain the export premium of 3p per unit for power that is not used on site, but is fed into the national grid.
The feed-in tariff payments will be guaranteed for 25 years for solar PV systems and for 20 years for wind energy systems, and are inflation linked. For domestic properties, the payments will also be exempt from income tax.
The Clean Energy Cashback scheme is designed to make small scale renewable energy systems more economic and therefore more attractive and accessible to homeowners, communities and businesses. The payment rates are set to deliver around a 5-8% return on investment for well sited installations. According to the Government’s own figures, a typical 2.5kW well sited solar PV installation could offer a homeowner an annual reward of £900 as well as saving them £140 per year on their electricity bill. Critically, it will also save about 1 tonne of carbon emissions per year.
As these payment rates will be guaranteed for a period of 25 years in the case of solar PV systems, and the life-expectancy of such a system is about 50 years, this scheme will provide owners with many years of pure profit from the electricity they generate.
In its announcement, the Government states that it expects that the scheme will support over 750,000 small scale low carbon electricity installations by 2020 and will have saved 7 million tonnes of carbon dioxide.
See the Government’s press release at : http://www.decc.gov.uk/en/content/cms/news/pn10_010/pn10_010.asp
And the consultation response and Government decisions at: http://www.decc.gov.uk/en/content/cms/consultations/elec_financial/elec_financial.aspx