Households and communities who install generating technologies, such as small wind turbines and solar panels, will from April be entitled to claim payments for the low carbon electricity they produce.
Energy and Climate Change Secretary Ed Miliband announced the feed-in tariff (FITs) levels and also published a blueprint for a similar scheme to be introduced in April 2011 to incentivise low carbon heating technologies. The renewable heat incentive (RHI) will be a world first.
The schemes are designed to bring about a significant increase in the amount of locally produced green energy, as a contribution to the wider shift of the energy mix to low carbon.
From 1 April, householders and communities who install low carbon electricity technology, such as solar photovoltaic (pv) panels and wind turbines up to 5 megawatts, will be paid for the electricity they generate, even if they use it themselves. The level of payment depends on the technology and is linked to inflation.
They will get a further payment for any electricity they feed into the grid. These payments will be in addition to benefiting from reduced bills, as they reduce the need to buy electricity. The scheme will also apply to installations commissioned since July 2009 when the policy was announced.
A typical 2.5kW well sited solar pv installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.
The Department of Energy and Climate Change also published plans for a scheme to incentivise renewable heat generation at all scales. This will come into effect in April 2011 and guarantee payments for those who install technologies such as ground source heat pumps, biomass boilers and air source heat pumps.
Under the proposed tariffs the installation of a ground source heat pump in an average semi-detached house with adequate insulation levels could be rewarded with £1,000 a year and lead to savings of £200 per year if used instead of heating oil.
The heat incentive could help thousands of consumers who are off the gas network lower their fuel bills and gain a cash reward for greening their heating supply.
Details of funding for the scheme will be published in the Budget 2010.
Information Notes
Ofgem will administer the feed-in tariff scheme and suppliers will be responsible to paying the reward to their customers.
The renewable heat incentive will start operating in April 2011. Ofgem will be responsible for making payments direct to heat generators.
Householders and communities can apply for the feed-in tariff from their electricity supplier from April 2010.
[KF] As at the mid point of February, 54,758 vouchers had been snapped up under the Government's Boiler Scrappage scheme - leaving around 70,000 vouchers worth a total of £28 million still up for grabs.
The scheme was launched in January to upgrade up to 125,000 household heating systems in England to cut carbon, save money on fuel bills and sustain work for the heating industry. All the major energy companies which sell and install boilers (British Gas, E.On, npower and Scottish & Southern) have now matched the offer, giving householders potentially £800 off the cost of a new efficient boiler. Some manufacturing companies are also offering deals.
Roger Webb, Director of the trade association Heating and Hotwater Industry Council, said:
"The boiler scrappage scheme has injected new life into the domestic heating market for both manufacturers and installers. Industry has been stimulated on many levels and the generation of enquires has been huge.
"Installers are thrilled that both existing and new customers are realising the benefits of this scheme and actually acting on the chance to replace their "G-rated" boilers."
Boiler Scrappage Scheme Updates
Eighty-seven social housing projects across the UK are set to benefit from a share of £17 million of government funding to test low carbon building technology.
Retrofit for the Future - the first programme of its kind in the UK - will see social housing units across the country retrofitted with new, innovative technologies.
There was an initial design phase, where over 190 organisations - including housing associations, architects and construction companies - received up to £20,000 each to carry out full feasibility studies and devise innovative proposals.
From the design stage proposals, 87 have now been awarded proof of concept development contracts to carry out retrofits on current social houses.
Each of the retrofit prototypes will receive an average of £142,000 to demonstrate deep cuts in carbon emissions and exemplar energy efficient measures in UK social housing.
Key retrofit features include:
Each demonstrator house will be evaluated by the Energy Saving Trust for at least two years and the potential for lower cost implementation in volume across the remaining UK social housing stock assessed.