Households and communities who install electricity generating technologies such as small wind turbines and solar panels will be entitled to claim payments for the low carbon electricity they produce from April. The DECC said the FiTs will offer returns on initial investments of between 5 and 8%.
In addition to announcing the FiT levels, Energy and Climate Change Secretary, Ed Miliband, has also published a blueprint for a similar scheme to be introduced in April 2011 to promote low carbon heating technologies. The DECC reports that the renewable heat incentive (RHI) will be a world first.
“The guarantee of getting an income on top of saving on energy bills will be an incentive to householders and communities wanting to make the move to low carbon living,” said Ed Miliband. “The FiT will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past. It will also change the outlook for a range of industries, in particular those in the business of producing and installing small scale low carbon technology.”
From 1 April householders and communities who install low carbon electricity technology such as photovoltaic solar panels and wind turbines up to 5 MW 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.
A typical 2.5kW well-sited solar installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.
FiT for renewable heat
The Department of Energy and Climate Change also published today plans for a scheme to ramp up 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.
The heat incentive could help thousands of consumers who are off the gas network lower their fuel bills and gain a cash reward for greening their heating supply.
Details of funding for the scheme will be published in the Budget 2010.
For additional information:
