Clean Energy Cashback scheme may not incentivise business
By phil. Filed in Climate Change, energy-saving |
The Government unveiled the final version of its Clean Energy Cashback scheme today amid wide consensus that it will help revolutionise UK energy generation – but with concerns raised that it may not go far enough to attract adequate investment, especially from businesses.
The Government says the Clean Energy Cashback scheme, which will come into effect on April 1, will offer a five to eight per cent return on initial investment to businesses and households that invest in technologies, such as small wind turbines and solar. The scheme works by allowing businesses and households that install such technologies to claim payments for the low carbon technology they produce over a 10 to 25 year period.
Installations up to five megawatt (MW) in size will qualify under the scheme – also known as feed-in tariffs – and tariff payments will range from 4.5 pence per kilowatt (kW) for hydro to 41 pence for retrofit photovoltaic (PV). Technologies under the scheme will also earn a further bonus payment for power exported back to the grid.
According to Department of Energy and Climate Change (DECC), power generated from a 2.5 kW PV installation could earn £900 in cashback, on top of £140 reduction on a household’s energy bill.
Following the consultation, the Government has introduced some changes to the scheme, such as increasing tariff payments for certain technologies like PV, and increasing all tariffs in line with inflation. However the changes still fall short of what some renewable firms and environmental groups had been calling for.
Clean Energy Cashback scheme tariffs still too low
Friends of the Earth, the environmental group that led the campaign for the Clean Energy Cashback scheme, expressed its disappointment, saying that the payment levels should have been set to produce a 10 per cent return on investment instead of five to eight per cent. It said as things stand, the scheme would likely only contribute two per cent of UK electricity by 2020, despite research that shows it could generate three times as much if tariff payments were higher.
“Installing renewable technologies will now be a good investment for many homes – but farmers, businesses, communities and others will get little or no extra incentive to invest in clean electricity,” said Friends of the Earth’s energy and climate campaigner Dave Timms.
Biomass left out of feed-in tariff scheme
The Renewable Energy Association (REA), which campaigned with Friends of the Earth for feed-in tariffs, said the potential impact of the scheme on all sectors “should not be underestimated”.
But it expressed its surprise that anaerobic digestion (AD) was the only biomass technology that had been kept in the scheme, saying that even for this suggested levels were inadequate for delivering the large potential number of small AD plants for farms and communities. It also expressed its disappointed that feed-in tariffs were not going to be used to help advance the commercialisation of new technologies, including wave, tidal and pyrolysis.
Tags: energy, energy-saving
