Getting paid to produce your own energy!

In the past we would buy electricity from large energy companies. From 1st April 2010 however, energy companies will pay businesses and individuals to produce their own electricity. In addition, they will also pay for electricity exported into the grid. So by installing a qualifying renewable energy system not only do you save money by reducing your energy bill, you’ll receive some income as well.

While it may sound too good to be true, it’s not. The Government has introduced Feed in Tariffs (FITs) to help grow the amount of renewable energy generated in the UK. Similar FITs have been used for a number of years in other European countries and are seen as a way of supporting the development of a renewable energy industry. In Britain, the FIT will be index linked and available for up to 20-25 years, depending on the system.

The FIT scheme launched this year covered the production of renewable electricity which can be produced by solar panels, small wind turbines and small hydro schemes. We will be familiar in the highlands with wind and hydro power. As technology improves, it’s possible for solar panels to work in overcast weather, though not as effectively as in bright sunlight. Consequently solar energy systems are being increasingly promoted in the highlands. This could also be a result of FITs creating a growing interest in solar energy systems in the south west of England – the sunniest part of the country. This interest is leading to the emergence of different business models with some companies installing a system and collecting the FIT payment while the property owner benefits from lower energy bills.

Of significant interest for business and home owners in the highlands is a FIT called the Renewable Heat Incentive (RHI), to be launched on the 1st of April next year. The RHI will reward producers for the “units of heat” produced by their renewable heating system. Combine an abundant source of wood fuel in the highlands with the RHI payment and we could have a financially attractive alternative to traditional oil and LPG heating.

The new UK Government recently confirmed their commitment to FITs. They will review the payments in 2012 and this may lead to a reduced premium. However, over the coming years, energy prices will increase. Installing a micro renewable energy system to reduce energy bills and the scope for a FIT payment, could go some way to offsetting rising energy costs.

Key Feed In Tariff issues for your business

Before thinking about renewable energy systems or FITs a business should look to maximise the energy efficiency of its properties and operations. The best way to do this is to develop a simple energy management improvement programme.

To qualify for the FIT payments, design, installation and commissioning of the renewable energy systems must be undertaken by accredited installers.

It is likely that grants for installing micro renewable energy systems will be stopped, with FITs providing the financial incentive to install small renewable energy schemes in the future.

The RHI could be a significant opportunity for highland business that are significant “heat users”. Hotels, guest houses and restaurants could all benefit from the RHI which will support an alternative to traditional rural oil, LPG and electric heating.

For more information on these topic or to discuss its implications for your organisation, contact archie@practically-green.co.uk or phone 07584 297485

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