Feed-in tariffs could prove “missed opportunity” for businesses
Greenwise Staff
8th October 2009
Businesses and other organisations are being warned that they could be missing out on a huge opportunity if they fail to respond quickly to a Government consultation on ‘feed-in tariffs’, which are being introduced to kick-start UK renewable micro-generation next year.
The Renewable Energy Association (REA) says that the current proposals being put forward for the scheme – which will offer a fixed premium to renewable energy generators for spare electricity they generate – may not be attractive enough to encourage investors, such as commercial companies, farmers and community groups, to invest in the renewable energy technology that will required for the scheme to work.
The Government’s consultation on proposals for a system of feed-in tariffs is set to close on October 15 and the REA is concerned about the levels of awareness of the scheme among investors for larger micro-generation schemes. Through its own consultation through the summer with around "50 diverse organisations", it says awareness about the scheme and how it worked were low, while concerns were also raised among potential investors about the low levels of return on investment offered by the UK scheme.
“The feedback we’ve had so far suggests that, as currently set out, the scheme will not be attractive to many important investors or for larger schemes,” said REA head of On-Site Renewables Stuart Pocock. “It will be a huge missed opportunity if the scheme only works for more affluent homeowners.”
The Government’s feed-in tariff scheme is due to be introduced in April next year and will apply to renewable technologies, such as wind, photovoltaic and biomass up to five megawatt in size. Under current proposals, those eligible for the cashback on feeding their renewable electricity back to the grid, would receive a five to eight per cent return on their investment, depending on the technology. It is thought this will be too low to encourage widespread investment in renewable technologies.
In Germany, for example, where feed-in tariffs have been introduced successfully, boosting turnover and jobs in the renewable energy sector, the return on investment typically offered through feed-in tariffs is 10 per cent.
The REA is urging anyone concerned about climate change to respond to the consultation on feed-in tariffs before it closes. “Tariffs offer an opportunity for everybody to invest in the renewables revolution and consultation is relevant to everybody with an interest in climate change, energy security and renewables. Don’t be put off by the technical questions – tariffs are meant to be user-friendly and your views matter,” said Pocock.