Individuals and businesses who install wind turbines and solar panels on their homes will be able to claim cash back from April of this year.
The government unveiled its proposals for “feed-in tariffs” today. The tariffs will enable businesses to contribute electricity to the national grid and claim cash for doing so.
The Department for Energy and Climate Change said for instance that the power from a solar panel could earn £900, on top of £140 reduction on household energy bill.
It also published what it called a “blueprint for the world’s first incentive scheme for renewable heat.”
It added that the tariff levels would be index linked, and that it would pilot a micro combined heat and power scheme to kickstart the industry in the UK.
From 1 April householders and communities who install low carbon electricity technology such as solar photovoltaic panels and wind turbines up to 5 MW 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 2008 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.
The Combined Heat and Power Association said the inclusion of microCHP was a “step in the right direction.
Graham Meeks, Director of the CHPA, commented: “Support under the Feed-In Tariff is vital in the early stages of commercialisation for microCHP. It will help secure the UK’s world-leading position in this exciting low-carbon technology, whilst giving householders a cost-effective choice in cutting their carbon footprint.”
Get full details of the tariffs here.