LONDON (Reuters) - Britain plans to expand its feed-in tariff system for small renewable power generation, such as solar panels and small wind turbines, to include the world’s first incentive scheme for renewable heat.
The Department for Energy and Climate Change (DECC) said on Monday the scheme for renewable heat would start in April 2011 following the introduction of feed-in tariffs for small power generation in April this year.
The feed-in tariff systems are similar to those that have propelled solar power and wind farm growth in Germany or Spain.
The government hopes feed-in tariffs will bring about a significant increase in locally produced green energy, helping to cut greenhouse gas emissions, while securing energy supply.
“They (the schemes) should see a real growth in the UK in the renewable sector,” said Andrew Lee, managing director of Sharp Corp’s solar unit in Britain.
“Previously the UK lagged behind the rest of Europe,” he said, adding only about 1 percent of about 5,000 solar panels Sharp makes each day in Wales were installed in the country.
DECC calculated small scale renewable installations could meet 2 percent of UK electricity demand in 2020, helping raise the green power’s total share in the country’s overall generation to about 30 percent from 5.5 percent at present.
Britain’s small wind sector has already been booming in the run-up to the scheme’s introduction, with many rural homes, farms and small businesses putting up turbines in yards to counter higher energy prices and blackouts.
Householders and communities that 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.
They will get a further payment for electricity they feed into the grid. The scheme will also apply to installations commissioned since July 2008 when the policy was announced.
DECC said the scheme for renewable heat would apply for all scales as Britain needed it to raise to around 12 percent from less than 1 percent at present.
It 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, DECC said.
Graham Meeks, director of the Combined Heat and Power Association (CHPA), welcomed the move.
“It will help secure the UK’s world-leading position in this exciting low-carbon technology,” he said in a statement, referring to microCHP, a boiler replacement that generates electricity with heat and hot water.
However, environmental group Friends of the Earth say the scheme could generate three times as much green power if the tariffs were set for a 10 percent return on investment, instead of 5-8 percent.
“There is huge public support for small-scale green energy schemes,” said Dave Timms from Friends of the Earth.
“The government must do much more to tap into this enthusiasm and ensure that everyone plays their part in developing a safer, cleaner future.”
Reporting by Nao Nakanishi; editing by Sue Thomas