UK finally FiT for solar power incentives

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It may seem to some that introducing the UK’s feed-in tariff on April fool’s day is a bit of a dig in the ribs, since the country has waited so long to catch up with its European counterparts in the renewable energy world. Yet this is no joke – the time has actually arrived. From this day forth, the UK will receive a financial payback for the solar energy it produces.

Householders who install small-scale solar panel systems are now eligible to receive up to £1,000 a year, tax free for 25 years, for the electricity they generate under the new government Clean Energy Cashback scheme, known in most other countries as the feed-in tariff (FiT).

Government figures reveal that any UK resident who installs a typical 2.5kW PV system at their existing abode will initially be paid a very generous 41.3p/kWh generated. That’s enough, according to energy and climate change secretary Ed Miliband, for a reward of up to £900 in the first year on top of a £140-a-year saving on energy bills. While most will stare wide-eyed at this great deal, sceptics will point out that the payback doesn’t quite outweigh the £10,000 to £12,000 upfront cost of the system – well, not at first anyway.

Some UK energy providers are offering schemes to combat this cost. British Gas will offer 500 households a ‘Pay As You Save’ scheme with the Energy Saving Trust, where householders will pay back the upfront cost through the monthly savings on their bill.

The Department of Energy and Climate Change (DECC) also hopes to help out with the initial charge. The Department wants seven million households – owner-occupied and rented – to benefit from the FiT scheme by 2020. It wants to make loans available to the widest possible group rather than just the well off, aiming to have one point of contact for those hoping to get a loan to help with the cost of a solar system, whilst also pushing applicants to the most appropriate commercial supplier.

This initial expenditure doesn’t seem to have poured too much water on the solar fire though, as UK panel installer Solarcentury announced today that it had seen a fourfold increase in sales enquiries since the tariffs were announced back in February. The company claims that hundreds of households throughout the UK have already taken steps towards the implementation of solar electricity.

Derry Newman, CEO of Solarcentury says, “We work with the best solar installers in the country, and we’ve put solar on thousands of homes, so we know what it takes to do it right and how to make it easy.”

Andy Atkins, executive director of Friends of the Earth, also supports the financial incentive. “Feed-in tariffs are a significant step towards the creation of low-carbon future. The huge increase in enquiries to green energy firms demonstrates the enthusiasm that households have for generating their own renewable electricity. This scheme allows them to play their part in tackling climate change – and earn money too.

“Many councils and housing associations are also looking at how they can use feed-in tariffs to provide the benefits of solar power and other renewable energy technologies to low-income communities,” said Atkins.

The FiT scheme has encouraged housing associations, public buildings and businesses to switch to the greener side of life. Some public sector organizations, as well as businesses, have already taken the plunge by including solar solutions in their buildings, including The London Fire Emergency and Planning Authority and the Metropolitan Police.

IMS research predicts that the UK market will see new installations in 2011 reach 250MW compared to the 22MW installed in 2009. Managed correctly, the UK market for solar power could grow in line with the German market of 10 years ago, which accelerated from 40MWp in 2000 when the FiT was released to 850MWp in just six years.

In order to boost the UK market, and open eyes to the possibilities it can hold for global PV manufacturers, Photovoltaics International, in partnership with the Renewable Energy Association, will hold a one-day conference on May 4, 2010 at the Grand Metropark Jiayou Hotel, Shanghai. The conference will coincide with the SNEC show taking place in Shanghai from May 5-7.

Endorsing this business initiative, the Rt Hon Lord Mandelson, first secretary of state, secretary of state for business, innovation & skills and Lord president of the council, said, “This Delegation reinforces our determination to foster strong business partnerships between Chinese and UK organizations committed to accelerating the adoption of solar energy. Such co-operation between the UK and China is one of the keys to growing the solar industry and green jobs in the UK.”

“Doing Solar Business in the UK is an important step in reducing costs throughout the solar supply chain. The implementation of a micro-generation feed in tariff scheme shows that the UK takes renewable power generation obligations seriously,” continued Lord Mandelson.

Among the speakers at the conference will be Ray Noble, PV Specialist of the Renewable Energy Association (UK) and member of the MCS steering committee administered by the Department of Energy and Climate Change. “This delegation and conference is vital for the growth of the UK PV market. The REA is delighted to be partnership with Photovoltaics International as it brings together the key stakeholders in this industry,” said Noble.

It will be interesting now, in the midst of many other countries cutting their tariffs, to see how the UK’s solar industry really does progress now that it finally has a reason to do so.

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