Feed In Tariff

Financial incentives for installing new wind turbines has been increased from April 2010. Following the recent Energy Act (2008) the UK Government has decided to implement a new ‘feed-in tariff’ initiative designed to encourage the use of renewable energy among UK property owners and small businesses, which is great news for anyone thinking about installing a wind turbine in England, Scotland or Wales.

[Full Report can be viewed here]

Government Incentive

Following the Department of Energy and Climate Change’s (DECC) publication, ‘Consultation on Renewable Energy Financial Incentives’, the financial reward for installing a small wind turbine will be greatly increased. Following the ‘Feed-In Tariff’ model which has proven so successful around Western Europe, the Government will launch the ‘Clean Energy Cash Back’ program in order to stimulate residential investment in renewable energy sources. At the heart of the scheme is a ‘total generation tariff’ of 26.7p/unit for early adopters of renewable electricity generated from small wind turbines in the 1.5-15kW range. This incentive will replace the carbon credit (ROC) scheme for small wind turbines, which is currently worth circa 9p/unit. Additionally the turbine owner will be able to sell any additional electricity back the grid, as well as reducing their own energy bills.

Financial implications

For example - A Gaia Wind 133 turbine generating 35,000 units of green electricity pa, can earn £9345.00 (35,000 x 26.7p) for FIT payments alone, this figure does not include any surplus electricity sold back to the grid!

Degression

Degression has been factored into the new Feed In Tariffs, basically this rewards early adopters. From April 2012, the FIT will be reduced by 3%, and annually thereafter (see chart below). The exact FIT you get paid, is fixed at the time the system is installed, and then annually adjusted for inflation.

Existing Systems

These systems remain ineligible, except those transferring from the Renewables Obligation (at the fixed rate of 9p/kWh). The government has also ruled out refurbished and re-commissioned systems from being eligible. The rationale is that the actual hardware may have recieved grant assistance previously through its life.

Final Feed-in Tariff levels