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[ Green opportunities: FITs ] S About the author

Andrew Brister Andrew Brister is a freelance journalist and editor. He has been involved in the building services sector for over 20 years.

o it wasn’t all doom and gloom in the recent Comprehensive Spending Review. The industry anxiously awaited the news of where the axe would fall as Chancellor George Osborne

unveiled his plans for cutting public sector spending by £81bn over the next four years. But there were certainly some glimmers of hope for those in the building services sector, particularly if you are involved in energy effi ciency and renewables. The coalition gave the green light to the £860m

funding for the Renewable Heat Incentive (RHI), which will be introduced in 2011-12. It is hoped that this will drive a tenfold increase in renewable heat in the next decade. The scheme will complement the introduction of Feed-in Tariffs (FITs), which has seen installations of solar photovoltaics (PV) rocket since the allowance arrived in April this year. ‘The UK’s legally binding renewable energy target

always meant that the RHI had to be launched, despite the economic challenges we face,’ says Kelly Butler, marketing director at electrical equipment trade body BEAMA. ‘The real challenge now is to ensure the scheme is designed to be attractive to the customer – and help grow the market for important technologies such as heat pumps. Now the real work starts as we gear up the heat pump industry to deliver the 1.4m heat pumps to be installed by 2020.’

How it all FITs together

The new system of Feed-in Tariffs (FITs) came into force on 1 April 2010. They provide support aimed at small low-carbon generators, offering fi xed payments for micro generation of less than 5MW in the following technologies: wind, solar PV, hydro and anaerobic digestion. Domestic scale microchip (with a capacity of 2kW or less) is currently being piloted.

Solid or liquid biomass technologies continue to be supported under the

Renewables Obligation (RO) at all scales. Wind, solar PV and hydro installations of 50kW or less and microCHP projects

supported through the pilot will have to use the Microgeneration Certifi cation Scheme (MCS) in order to be confi rmed of their eligibility for FITs. Any other technology and scale of project must be registered through a process based on the existing RO process, known as the ROO-FIT process. FITs payments are made through two separate tariffs, the generation tariff and an

export tariff. The generation tariff has the added bonus that not only do generators get paid for producing electricity on site, but they will also be able to offset this against electricity they would otherwise have had to buy. The current generation tariff, 41.3p/kWh for solar PV, provides an eight per cent return on investment. The second export tariff allows any excess electricity generated, but not used on site, to be exported back to the grid for an additional payment fee, which is currently set at a rate of 3p/kWh. Overall, FITs may provide not only an incentive for on-site microgeneration and

smart metering installations, buy they should also encourage energy reduction measures as well, because the lower a building’s demand for energy, the more electricity the building owner will be able to export back to the grid for payment. The Spending Review of 20 October 2010 announced that FITs will be reviewed

in 2012, unless higher than expected deployment requires an early review. The government has identifi ed scope to cut FIT costs by 10 per cent, to be achieved as part of its next review.

Winter 2010 ECA Today 21


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