Energy News

Earn cash rewards for generating electricity

Monday, 1 February 2010

By Hazel Cottrell - hazel@consumerchoices.co.uk

Generating your own renewable electricity is now more attractive, as the government finalises the amount you could earn by selling it.

Households that install renewable energy technologies, such as solar panels and wind turbines, will be able to sell their electricity to the National Grid at a guaranteed price from 1 April 2009.

The government’s new policy on feed-in tariffs, means that homeowners will be paid a competitive rate for the electricity they generate. The rate will be set by the government and linked to inflation.

Climate change minister Ed Miliband said: “The guarantee of getting an income, on top of saving on energy bills, will be an incentive to householders and communities wanting to make the move to low carbon living.”

The rate that Brits can sell their renewable electricity to the Grid will depend on the type of technology they install, but feed-in tariffs should offer them between 5-8% annual return on their initial investment in the technology.

The Department of Energy and Climate Change has calculated that a typical 2.5kW well-sited solar PV installation could earn a household cashback of up to £900 from energy suppliers, and save them £140 a year on their electricity bill.

New laws, due to be passed through parliament this week, will make changes to energy suppliers’ licences that will force them to take on feed-in tariff customers. Lord Hunt, minister of state for the Department of Energy and Climate Change, said: “Energy suppliers will be mandated to join the scheme.”

The cost of supporting feed-in tariffs will be passed on to standard energy customers and it has been forecasted that the feed-in tariff scheme will add around £11 to the typical household’s annual bill by 2020.

Chris Eagle, commercial manager at Creditchoices.co.uk, said: “These new guaranteed rates could dramatically reduce the time it takes to earn back the cost of your investment in renewable energy.

“If you’re interested in installing renewable energy technology, contact the Energy Saving Trust (www.est.org.uk) for free, independent advice.”

The government is also planning to introduce a renewable heat incentive, offering payments to large heat generators, in April 2011.