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Generating Your Own Power: Government Schemes

By: Susan Hunt MA - Updated: 25 Sep 2012 | comments*Discuss
Feed-in Tariffs Tariffs Fits Electricity

Generating your own power has never made quite so much sense thanks to new government incentives.

And if you’re planning a new build or renovation, then incorporating power generation into your design now makes sound financial – as well as environmental – sense.

Under recently introduced schemes, people generating their own electricity qualify for special payments and of course, that’s in addition to the fact that they will need to buy less power through their usual electricity supplier.

Solar and Wind Power

The payments, known as feed-in tariffs (FITs) began in April 2010 for power generating technologies such as solar panels or small wind turbines but they are also on offer to people who installed this type of technology from July 2009 when the policy was announced.

The feed-in tariff scheme is being operated by industry regulator Ofgem and electricity suppliers will be responsible for passing on the payments to customers.

The tariff means a much shorter repayment on investment time for people installing green power technologies and the government hopes it will help to bring about a major increase in the amount of green energy produced locally.

The scheme has been broadly welcomed by environmental groups and some solar power companies are predicting a solar revolution but many critics say the tariff payments are too low. (In Germany, for example, payments were much higher when a similar scheme was first introduced.)

Paid for Power

One of the most attractive points about the payments is that you are paid for the electricity that you generate, even if you use it yourself. (The level of payment will depend on the type and size of the installation and will be linked to inflation.)

Better still, householders who produce excess power will be paid for feeding it back into the national grid. According to figures produced by the Department of Energy and Climate Change, a 2.5kW solar pv installation sited in a good spot could save a household around £140 per year on their electricity bill and they would also receive a reward of up to £900.

More to Come

The government is also planning to introduce a new incentive from 2011 to encourage low carbon heating technologies.Expected to be a world first, it will offer guaranteed payments to people installing technologies such as ground source heat pumps, biomass boilers or air source heat pumps.

Provisional figures suggest that a family living in an average sized semi-detached house with good insulation could receive a reward of around £1000 per year plus fuel savings of £200 per year if they use a ground source heat pump rather than heating oil.

The scheme is likely to appeal especially to people who don’t have access to mains gas.

Green Tariffs

Of course, there are people who would like to generate their own power but live in a home that is totally unsuitable for a solar power or small wind turbine installation.

They can still play their part by signing up to a green energy supplier or switching to a green tariff with their existing supplier.

Currently, only about 5.5% of the electricity used in the UK comes from renewable sources and only one per cent of heat comes from such sources.

The government wants to increase the amount of electricity produced by renewables to 30% over the next eight years to meet the nation’s targets.

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