Other countries have had them for years, we’ve campaigned on it, and now it’s arrived: Britain finally has a feed-in tariff. From April 1st, households and communities installing micro-generating solar panels or wind turbines will be able to claim higher prices for any energy they create.
Energy Secretary the measure today. “The feed-in tariff will change the way householders and communities think about their future energy needs,” he said, “making the payback for investment far shorter than in the past.”
A feed-in tariff is essentially a subsidised price for renewable energy. By guaranteeing a higher price for green electricity, people are able to invest in solar panels knowing that they will at least make their money back, or even make a profit. Without a feed-in tariff, solar panels do not pay for themselves before they wear out and are usually a net loss, meaning only wealthy ecologically minded house-owners could install them.
As more people are able to invest in micro-generation, demand will rise, and more companies will enter the market. This creates competition which in turn lowers prices, creating a virtuous circle that will drive the development of green energy.
Milliband also announced a feed-in tariff for sustainable heat generation today, apparently a world first. Starting in 2011, those using ground source heat pumps or solar thermal would also be able to claim payments, which are funded through a small levy on energy bills.
Campaigners have welcomed the move, although they had hoped for a more generous package. “Ministers have been far too timid,” says Dave Timms from Friends of the Earth. “There is huge public support for small-scale green energy schemes. The Government must do much more to tap into this enthusiasm and ensure that everyone plays their part in developing a safer, cleaner future.”