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Miliband releases FIT and Renewable Heat Incentive details

The UK government has today released details of its Feed-In Tariff (FIT) scheme which from April 1, pays those installing small-scale low carbon technologies for the electricity they produce.
Miliband releases FIT and Renewable Heat Incentive details
Feed-In-Tariff scheme - April 1, 2010

The FITs scheme is a financial incentive introduced by the government from April 2010 to encourage the uptake of small-scale low-carbon microgeneration technologies that generate electricity, such as Baxi Ecogen micro-CHP.

FIT is intended to support all microgeneration electricity generation sources used below 5MW. Householders and communities will be paid for the electricity they generate, even if they use it themselves. Under the new scheme, they will get a further payment for any electricity they feed into the grid. (These payments are in addition to reduced bills they get, as a result of a reduced need to buy electricity.)

The government is initially supporting the following renewable technologies under the scheme:

Anaerobic digestion
Hydro-power
Solar photovoltaics
Wind power
Gas-powered combined heat and power (Micro-CHP)

The FITs will consist of two parts, a generation tariff and an export tariff. Generation tariff means the the electricity supplier will make a fixed payment to the householder for every kilowatt hour (kWh) of electricity they generate. The export tariff means the electricity supplier will pay a fixed amount for every kWh of electricity exported by the householder back to the electricity grid

The generation tariff depends on the type of technology installed. For solar PV starts at 29.3p /kWh but the actual payment will depend on the system and how it's installed.

FITs will be paid over a minimum of 10 years from the date the system is first registered. All eligible microgeneration systems already installed will qualify from that date. The FIT scheme does not extend to Northern Ireland. The government says the FIT scheme will help it deliver the UK's 2020 renewable targets.

'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. 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' said Energy and Climate Change secretary Ed Milliband.

MicroCHP units with a capacity below 2kW will receive 10p per kW hour generated, for a period of 10 years. This tariff is available for the first 30,000 microCHP installations. A review will take place when 12,000 units have been installed.

Responding to the news, a spokesman for the BAXI group said: 'The Baxi group is disappointed that the generation tariff for micro-CHP is set at a lower level than expected, 10p/kWh*. While this is a valuable contribution, it will not generate the same level of take up as the industry has been hoping for'.

She added: 'The UK is currently leading the world in terms of micro-CHP development and today's news will help to promote growth in the mCHP market. However, it will not deliver the scale of market growth or economic benefits that would have been achieved if the requested 15p generation tariff level had been awarded.'

Those who have a microgeneration system installed, must notify their utility provider which will pay the FIT. The utility firms are still developing the systems that will administer FIT payments but it is likely that FIT values will appear as a separate line on the householder's utility bill. To be eligible for FIT, both the microgeneration product and the installer who fits it must be MCS accredited.

Renewable Heat Incentive proposals - April 1, 2011

The government has also published today detailed consultation proposals for a Renewable Heat Incentive (RHI) which will incentivise renewable heat generation at all scales (regardless of whether they are small, medium or large.)

Due to start in April 2011, the RHI will guarantee payments for those who install ground source heat pumps, air source heat pumps, biomass boilers and solar thermal.

The consultation on the proposed Renewable Heat Incentive financial support scheme opens on February 1, 2010 and the deadline for responses is April 26. Click RHIconsultation for details.

The RHI proposals offer to guarantee that the average household will be paid more than £1,000 for the renewable heat they generate themselves. It offers long-term, fixed payments based on the type of installation. There will be payments also for every unit of renewable gas fed into the gas network.

Currently, renewable heat technologies meet just 0.6% of UK heat demand, but by 2020 the government aims to meet 12% or more of the UK's heat demand through renewables.

REA policy director Gaynor Hartnell said: 'The UK may be languishing behind the rest of Europe on renewable heat, but the proposals launched today are an important world first. The industry is confident these proposals give the UK pretty much the best chance of generating over 10% of its heat from renewables by 2020.'

To see details of the FIT scheme tariffs for April 2010 click Tariffs
1 February 2010

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