Feed in Tariffs, Solar Panels Feed in Tariff Incentive UK
Feed in tariff UK is a government backed incentive to encourage and support individuals to switch to renewable energy sources. This initiative was introduced by the department of energy and climate change for low-carbon electricity generation (less than 5MW). These feed in tariffs were introduced in the UK in the month of April, 2010 as an incentive to get people to switch to a green energy source.
This feed in tariff scheme is better known as the ‘Clean Energy Cashback Scheme.’ This scheme has been regulated and administered by OFGEM and the early players who entered this venture were paid through the feed-in-tariff schemes. This also has an additional price guarantee and the surplus electricity that remains unused can either be sold or exported to the national grid as per the guidelines of the feed-in-tariffs.
The owners of the solar PV generating system are beneficiaries of this feed-in-tariff scheme as the government, in recognition of their financial commitment, guarantees these owners the repayments on their investments. These feed-in-tariff schemes could be availed by anyone including schools, colleges, home owners, small businesses etc.
The Renewables Obligation or RO is the primary mechanism which offers incentives for these large-scale renewable electricity generation and feed in tariffs and RO work together.
Although the exact measurements of the heat that is generated through these installations cannot be measured, the government plans to arrive at an estimation which would be used in calculating payments.
These estimations would roughly be based on the amount of heat energy that would be essential to heat up the home as well as meet the hot water requirements, which would in turn depend on the age and the size of the home and the technology that is being used. Based on these calculations home owners will receive their annual payments.
For each kilowatt-hour of electricity which is generated through the renewable energy generating system the consumer is paid the feed in tariff even if it is for their own use. The surplus electricity which is unutilized is then sold to the national grid at the rate of 43.3p per kWh (the whole electricity that is generated) and exported at 46.4p kWh to the national grid.
Renewable heat incentive
The RHI or the Renewable Heat Incentive has recently been announced (2011/2012) and this is part of the Comprehensive Spending Review. From the beginning of June, 2011 the RHI will be used to encourage individuals to opt for solar thermal panels that can be used for heating purposes.
The Renewable Heat Incentive is designed to extend financial assistance to businesses, individuals, communities to switch to a cleaner, greener renewable energy source such as wood fuel instead of the fossil fuel which is non-renewable (coal, oil, and gas).
When the switch is made to the renewable energy system such as wood fuel instead of using the traditional heating systems such as gas, oil, and coal then a fixed amount is paid each year as an incentive for opting for green and clean fuel. This also helps in reducing the carbon emissions and thereby reducing the carbon footprint and thus preventing climate change.
For each kW of energy produced, the Renewable Heat Incentives pays generation tariffs. So, if you want to reduce the carbon footprints, become self-sufficient, and save on energy bills, or generate electricity through renewable energy generation systems, then Renewable Heat Incentive is the answer.
As per the recommendations by the government, the installations that had been completed before the 15th of July, 2009, will not receive the RHI support. Only the installations that were carried out after the 15th of July would be eligible for the feed in tariffs as this would be shown as though they were installed on the first day of the scheme. The renewable generation systems up to 5 MW-capacity would be eligible for the incentives.
Most of the households, businesses, educational institutions, shopping centers, supermarkets etc would come under the eligibility criteria as they would come under the 5 MW-capacity. Feed in tariffs are paid for every kW of energy that is being produced using the renewable generation systems.
However, the level varies as per the technology that is being used as well as the size of the system. The income from the feed in tariffs is not taxable and that is another added advantage.