A year of the Feed-in Tariff
Almost a year after the Feed-in Tariff was launched, Bill Rumble discusses its effect on microgeneration and what the future holds for solar PV.
Introduced in April 2010, the Feed-in Tariff (FIT) is the first step towards creating a mass market for microgeneration. Its main aim is to encourage homeowners and other small-scale power users to generate their own electricity by harnessing the sun’s energy. FIT rewards small-scale power generators for the amount of electricity they produce and the amount of electricity they sell back to the National Grid – calculated as import and export tariffs.
When the FIT was first announced it received a very warm welcome from the industry. Wide consumer appeal was targeted by measures such as index-linking the tariffs, introductory rates being held for the first 24 months and tax-exempt payments. The industry is certainly achieving a boost, but we are talking about a massive shift change in lifestyle, in spending habits and in educating consumers and business owners about the world of renewable technology. It’s no secret that we were a little slower off the starting blocks than many of our European neighbours but I believe the challenge still remains in driving a consumer awareness programme.
Growing industry
It’s been interesting to see that a number of companies across the industry have turned this challenge around and used the FIT to run their versions of a ‘rent a roof’ scheme. The idea behind these is to overcome the initial capital outlay barriers, which can be equal to the cost of buying a small family car and understandably puts many people off. Providers have attracted customers by offering to install solar photovoltaic systems for free and in return receiving the FIT payments themselves. Meanwhile, the consumer benefits from reduced rate electricity bills, as well as doing their bit for the environment and potentially adding value to their property.
Powerful incentive
Speaking as someone who is passionate about the microgeneration industry I think the FIT is a well thought-out and very reasonable incentive for encouraging consumer adoption of renewable technology. We are in the honeymoon period at the moment however and last October’s spending review stated that the government will review FIT in 2012 – unless ‘higher than expected deployment requires an early review’. A potential cut of 10% has been identified as part of the review, but its fair to assume this will be governed by adoption rates and how well the industry increases its capabilities.
As far as FIT is concerned, the best advice I can give is to work with the tools the government has provided us with. Take advantage of the early bird rates and buy in before the April 2012 deadline. That said, consumer renewable technology adoption levels could increase dramatically in June of this year. At time of writing, the Renewable Heat Incentive (RHI) is eagerly anticipated by everyone across the industry. Proposed by the last government and confirmed for launch later this year in the spending review, RHI will also financially reward homeowners and businesses for the microgeneration of heat. I think the launch of RHI will be the turning point in driving consumer awareness about the benefits of renewable technology and, we will see people being driven by their heads rather than their hearts as they realise that microgeneration is now a smart choice.”
With thanks to our friends at Green Build News.