The viability of on-site renewable energy generation is set to increase significantly next year with the Government’s proposed introduction of Feed in Tariffs (FITs).
These are set to become available in April for all renewable energy generators between 5kW and 5MW and will be guaranteed for 20 years. The Department of Energy and Climate Change (DECC) has recently closed its consultation over the proposed structure and levels of the tariffs. The outcome of the representations made is likely to become known in the spring.
FITs will replace the current Renewable Obligation Certificates (ROCs) regime, although larger generators will have the option of choosing which system they are remunerated under. Since April 2009 small scale renewable generators (less than 50kW) have been entitled to receive two ROCs.
To put this into context, at present, small scale wind developments will attract a payment of approximately 15p/kWhr for their combined electric and double ROC sales. The FIT (as per the DECC consultation) for a 10kW turbine is proposed to be 28p/kWhr. In suitable locations, these rates will make small wind projects viable and payback periods of five to six years should be achievable.
For commercial farmers and landowners, additional grant funding of up to 40 percent (capped at £25,000) may be available, in which case payback periods of three years may be attainable.
As more people look to the wind to generate power, single wind turbines on farms and rural developments are becoming more popular – and installing a small wind development scheme can help rural businesses offset their energy costs.
Anyone considering such a scheme should seek professional advice at an early stage and a detailed feasibility study of the project is advised at the outset. This should consider such issues as wind speed, grid connection, grant availability, any site constraints, and a detailed planning assessment.
Given that the UK is the windiest place in Europe, rural businesses should be capitalising on one of our most abundant resources.