Microgeneration Incentives
The South-west of England has the highest levels of solar radiation in the country. Which is why, with Feed-In Tariff incentives, says Lucy Hunt, it makes sense for Cornwall Council to invest in PV development
any companies understand there are clear business advantages to be gained by embracing corporate responsibility and ‘going green’. Leading the charge are some of the biggest names in busi- ness. Marks & Spencer has launched its ‘Plan A’ for sustainability. However, many smaller firms, keen to reap the benefits of building a sustainable business, are still unsure about the steps they can take to achieve their aim. Making the most of incentives to adopt renewable energy is one option open to busi- nesses. The UK is committed to generating 15 % of energy from green sources such as wind and solar by 2020, but currently only 3% of energy comes from renewables. That’s a big hill to climb in ten years. To achieve it there is a pressing need for businesses to buy into the carbon reduction agenda .
Enlightened self-interest
In April, the Feed-In Tariff (FIT) went live. This government scheme aims to encourage businesses and individuals to generate their own electricity. To do this, it appeals not just to our consciences, but to our eye for a good deal. According to some, it’s just about the best deal there is.
“It’s the best thing you can invest in between now and 2012,” says Tim German, who is responsible for renewable energy at Cornwall Council. “There’s no other way you could get that kind of return.” The scheme works like this. You choose a means of generating renewable energy, and decide the level of output you require. This can be anything up to an annual output of 5MW, enough to power 5,000 homes, but the greater the level upon which you decide, the greater your investment will need to be. As soon as you start generating electricity, you benefit in three ways: • Your electricity supplier pays you for each unit of electricity you generate. This is called the generation tariff
6 | Sustainable Business | Microgeneration | October 2010
• You are paid a further set rate for each unit you sell back to the grid – in other words, the electricity you are not using yourself. This is called the export tariff • You make savings on your energy bill, because you are generating for yourself. This is called an energy bill saving
A number of different renewable tech- nologies are eligible for the scheme. They comprise: • solar electricity, in the form of photovol- taic (PV) cells. These can be roof-mounted or stand alone • wind turbines. Again, these can be building- mounted or free-standing • hydroelectricity • anaerobic digestion • micro combined heat and power (micro CHP) – although this is, says the Energy Saving Trust, limited to a pilot at this stage
One thing is immediately obvious about TIPS FOR ENERGY BUSINESSES
Andy Tanner, managing director of Plug Into The Sun, estimates solar panels producing 10kW a year will cost around £35,000-£40,000 to install. Generation and export
tariffs, com-
bined with energy savings, should deliver a value of around £4,600 a year. This means the original investment will be paid off in under nine years, leaving over 16 years of clear profit – over £70,000. Larger-scale investments are as lucra-
tive. For a maximum 5MW installation, Tim German of Cornwall Council esti- mates the investment will be paid off with- in ten years. That investment could be between £10m and £12m, and the annual payback would be £1.6m to £1.8m.
Sunny money M
these options. Practically all of them require permanent onsite installations, and that means you need to be reasonably certain of your tenure at a site before you make your invest- ment. Why? Because the fixed tariffs you will receive for the electricity you generate are guaranteed for 25 years. It’s a big outlay for homeowners who may find they have to move house ten years from now – and that’s why the scheme ought to be so much more attractive to businesses and other organisations than to individuals. For one thing, they tend not to move around so much; and for another, their premises tend to be larger, making it possible to consider bigger installations. The bigger the installation, the bigger the up-front invest- ment – but the bigger the payback. There are different tariffs for different tech- nologies. However, different energy-produc- ing methods may be better suited to different parts of the country, for instance large-scale solar PV is best suited to South-west England, which has the highest levels of solar radiation in the UK.
In Cornwall, the local council is one organi- sation planning to take advantage of the coun- ty’s broad spectrum of natural resources and a new Act of Parliament enabling local authori- ties to become renewable energy generators with the ability to sell electricity. “We’re for- tunate in Cornwall to have possibly the best combination of natural resources in the UK,” comments Tim German. “At the moment we’re looking at how we could exploit a num- ber of technologies but, because of the high levels of solar radiation, our current focus in on a massive PV development, driven, of course, by the Feed-In Tariff incentive.”
Energy potential
So – is it working? Has the advent of the Feed- In Tariff seen an increase in interest from businesses and third-party organisations? The answer seems to be yes. Tim German reckons the investment coming into Cornwall alone
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52