Britain Launches Comprehensive System of Feed-in Rates

By Paul Gipe, Wind-Works.org

In a truly groundbreaking move for the English-speaking world, Britain's Department of Energy & Climate Change (DECC) has released a full suite of renewable energy tariffs that go into effect in April.

Britain will become the first country in the world to offer a comprehensive system of tariffs for renewable heat, including tariffs for solar domestic hot water and ground-source heat pumps among others.

In another first, Britain will also offer a tariff for biogas injected into natural gas pipelines.

And Britain will fully index the tariffs with inflation. This often overlooked aspect of the British program will significantly boost earnings by protecting investors from the ravages of inflation.

Britain has gone farther, faster than almost any other jurisdiction worldwide in moving to feed-in tariffs. From open ideological hostility to their new-found political embrace, the turn about has been striking and could offer the prospect for similarly rapid movement in North America.

However, critics charge that Britain's DECC has set its sights too low. The limitation of feed-in tariffs to a micro-generation "ghetto" remains troubling to many renewable energy advocates.

Wind, solar PV, and hydro projects are limited to no more than 5 megawatts, or roughly two commercial wind turbines. Further, the tariff tranche for wind projects from 1.5 to 5 MW is so low that only the windiest sites in Britain will be suitable, raising concerns about more siting conflicts.

"The introduction of cash incentives to boost small scale green electricity generation is welcome, however, ministers have been far too timid with a policy that could make a significant contribution to cutting emissions and boosting energy security," said Friends of the Earth's Dave Timms.

"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," Timms argues.

At the same time, the World Future Council's Miguel Mendonça says,

"The UK is taking its first steps towards a policy environment which encourages citizens, farmers and others to become an active part of the climate change solution — and make a solid investment while doing so."

Renewable Heat Tariffs

Potentially far more significant than the wind and solar tariffs, all of which have been done many times before, Britain's tariffs for renewable heat could be a game changer.

There has been widespread intellectual reluctance to tackle tariffs for renewable heat. It's as though policy makers don't understand that heat, in kilowatt-hours or any other units, is just as measurable as electricity. Then too, hot water from a solar panel is not quite as "sexy" as a spinning wind turbine or a gleaming solar-electric system.

But Britain finds itself in an unenviable position. Heat is needed, and the British Isles are at the end of the continent's natural gas pipelines. Coupled with the country's disastrous experiment with so-called market deregulation, Britain is vulnerable to gas shortages during the heating season.

In 2007, the Ontario Sustainable Energy Association (OSEA) recommended in its report Renewables without Limits that the Ontario Power Authority institute solar thermal tariffs of $0.20 CAD/kWh for residential solar thermal and $0.10 CAD/kWh for commercial solar thermal installations. OSEA's recommendation for the Canadian province was not included in the recently launched Ontario feed-in tariff program. OSEA also recommended that OPA set a tariff for biogas pipeline injection. This feature was also not included in the new Ontario program.

Where Ontario hesitated, Britain acted.

This one policy tweak could be the gem hidden in the British program.