FAQ's
Renewable Electricity and HeatTariffs - General Public FAQ
Q&A regarding tariffs for renewable energy, including Feed-in-tariffs and the Renewable Heat Incentive
What’s it all about?
Tariffs aim to make renewable energy technologies easily available to every person or organisation. Tariff schemes typically last 20 years allowing the industry to invest and expand production, bringing down the price of renewable energy technologies through a reliable framework of support. The scheme will also allow greater choice and competition to develop in the energy sector - everyone’s home, office, school or farm can become a mini power station!
Tariff schemes support all forms of renewable energy technology, so that more expensive technologies receive a relatively larger Tariff payment level. This is because we need to invest equally in all potential forms of renewable energy generation for the future.
The scheme will complement large-scale renewable energy generation and help to reduce the UK’s fast growing dependency on fossil fuel imports. Finally the scheme will help tackle climate change, not just by reducing UK CO2, but by helping to develop and bring down the costs of the technologies needed to tackle climate change globally.
What is a Renewable Energy Tariff?It is a payment made to the owner of a renewable energy system for every unit (kilowatt hour (kWh)) of energy produced by the system. The UK scheme will also pay a bonus for every unit of power exported to the grid that is surplus to requirements in the home/office/building. This will encourage efficient use of electricity as the more power you save, the more you will earn. Like international schemes the UK scheme will be ‘degressed’. This means that over time the Tariff payment offered is reduced. This does not mean your payment will decrease. It does mean that the year you start will determine your payment level and this will reduce with each year. This is to ensure the renewable industry acts to reduce its costs. In the UK Tariffs will be available for defined technologies up to 5MW in size (e.g. enough for 3 large-scale wind turbines in, say, a community energy scheme providing enough power for , say, around 3000 homes). Could you advise me – is this a good quote?The REA is not a body offering advice to the general public. A sister company – Renewable Energy Assurance Limited runs a code of good conduct for suppliers of renewable systems, and on that website is a section for members of the public. This covers why guidance is needed, the reasons for installing sustainable energy equipment, the importance of customers knowing their current energy use and what they should expect from the company with which they are dealing. Where can I find more information about renewables technologies?Please try the Energy Saving Trust - Renewable Energy Tariff information page. Or try calling the Energy Saving Trust helpline and to ask an advisor for advice. EST Helpine 0800 512 012
I have already got a PV panel / other renewable energy generating equipment. Will I benefit from these tariffs?Not necessarily, you may need to take swift action. If you had a system under 50kW installed before 15th July 2009 and it is NOT accredited to receive support through the Renewables Obligation you have until the 31 March 2010 to apply for accreditation under the RO. If it is already accredited you will benefit from a production tariff of 9p/kWh irrespective of the technology. If you had your under 50kW system installed after 15th July 2009, you can benefit from the new tariff higher tariff rates, shown in the table below. If your installation is compliant with the Microgeneration Certification scheme (which it will be if you got a grant under the low carbon buildings programme) you qualify. If not, you need to get your installation accredited under the Renewable Obligation before March 31st. If you are not sure if you are accredited, look at the Ofgem list of accredited generating stations under 50kW or ask your supply company. Microgenerators FITs scheme eligibility flow chart  Source: Department for Energy and Climate Change (2010). See page 18, FIT consultation response and Gov decisions What are the tariff rates?A description of the FIT scheme and the tariff rates can be found on the Department of Energy and Climate Change website.Generation Tariffs April 2010 - 31 March 2013: See page 26, FIT consultation response and Gov decisions What are the eligibility rules for larger installations (over 50kW)?
How do I claim the FITs?
Is this the same as a 'green tariff'?No - These tariffs apply when the user is producing their own renewable energy. A so-called 'green tariff' is what users pay for the supply of energy by an established energy supply company, when the energy company is generating that energy from renewable sources (or at least using more sustainable resources than the normal supply). Is this the same as the Renewables Obligation (RO)?No - The Renewables Obligation applies to energy supply companies and gives them an incentive to increase the proportion of renewable energy they generate. As mentioned below renewable energy installations will not be allowed to benefit from both the Tariffs and the RO. When will these tariffs be introduced?The timetables proposed by the government are shown if you follow these hyperlinks: The electricity tariffs are scheduled to start in April 2010 and the heat tariffs in April 2011. What types of renewable energy will be eligible?New AD, Hydro, Solar PV & Wind up to 5MW. It will also support 30,000 micro CHP installations with electrical capacity of 2KW or less as a pilot programme. How will it work for a typical householder?
An accredited installer will need to install technologies accredited by the Microgeneration Certification Scheme. Once registered, the owner will then be paid, via their electricity supplier, for all the renewable power they generate, with a bonus for any surplus power exported to the grid. The owner of the technology can stick with one supplier for everything, or they can have different contracts for generation and export with different suppliers. Smart metering will make all of this easy to do. However, interim arrangements will be needed until smart meters are rolled out. Not just Costs, but BenefitsThe Tariffs means economic benefits for the UK, not just costs. A healthy onsite renewables industry means quality local jobs, UK manufacturing opportunities and technological innovation. The Tariff scheme is effectively an investment in the UK’s renewable energy sector with a view to reducing the costs of renewable energy technologies over the next 20 years. The UK is currently missing out on this global industry worth billions.
Recent analysis by Ofgem suggests energy prices could rise by as much as 60% by 2020. Unless alternatives are found the UK stands to import 80% of its gas by 2020, with serious implications for energy security. Renewables can also be used to tackle fuel poor homes by reducing energy bills and the impact of sudden energy price rises. The REA is therefore concerned that the Tariffs work effectively for social housing providers, off grid areas (which are particularly high in incidents of fuel poverty), local authorities and Energy Service Companies. Invest in renewables and you can take control of the cost of energy by generating your own. From wood-burning stoves to solar thermal, from community biomass heating to solar pv, renewables can help you take control of your energy future. Where do I go for more Information?For more information please contact the following organisations The REA does not have the resources to deal with members of the public, but we hope the above information was useful. |