Green Homes

“Feed in Tariffs” by Mike Jacobs

‘Feed in Tariffs’, or FITs, are the hotly anticipated cash-back incentive intended to promote small scale clean energy generation.  They have been shown to be highly effective elsewhere at promoting greater uptake of renewable technologies such as solar PV and wind – decreasing  reliance on fossil fuels and enabling participating countries to reach binding CO2 emissions’ reduction targets.

Green Homes take a look at the implications for householders, the pros and cons of FITs and potential future scenarios for small scale renewable energy generation.

For years the standard objections to domestic level energy generation have fallen into two categories:  “It’s not efficient” and “it’s not financially viable.”  The efficiency argument has not been won, in that no amount of subsidy is ever going to make poorly sited technology more effective at doing what it’s designed to do.  However, the latter ‘payback’ argument is suddenly not so convincing.  

The clean energy cash back payments are index linked and guaranteed for 20 years (25 years is possible for solar). This means that one could see an average 8 or 9% return on investment and a significant reduction of the traditionally underwhelming payback times for installations.  For example a typical 2kWp domestic PV installation could now pay for itself in just 10 years or so.  The pre-FIT payback periods were the same as the expected life of the panels themselves i.e. 25 years!  In addition homeowners have a greater degree of protection from fuel price rises and can feel good that they are ‘doing their bit’.  For a full breakdown of FIT payments see the link at the end of this article.

In addition to the payments one can receive for generating and using clean energy, it is possible to receive bonus payments for surplus energy that is put back into the grid.  This indirectly promotes that most sacred of green maxims –that modifying behaviour and efficiency improvements to the building stock should be the first step to a low carbon future.  If we are paid more for energy that we don’t use in the home which gets fed into the grid then we may start to think more carefully about how we are powering our lives.

Critics of the scheme feel that it is placing undue emphasis on inefficient technologies, for example by offering higher payments for small vs. large scale wind energy generation.  In addition some say it is going to penalise the less well off in society in order to benefit those who can afford the initial upfront investment.  The onus is on the utility companies to make the payments, which will inevitably be off-set against higher bills across the board.  For readers who are interested in pursuing these arguments both for and against please follow the links at the end of this article.

Looking forward to where the market is heading in terms of technological improvements indicates an inevitable drive for lower cost solutions that deliver ever greater efficiencies.  There may come a time in the near future when domestic solar PV technology, traditionally very expensive and with very modest efficiencies, actually becomes affordable for the masses and even disposable.    

Who is going to deliver this and how?  Believe it or not the internet giant Google is behind a revolutionary technology company called ‘Nanosolar’.  This Silicon Valley company has developed a method for printing solar panels using a special ink which contains the semi-conductors and nano-particles required to generate electricity.  They claim it is cheaper than any alternative and expect to enter the domestic market soon.

This technology is similar to newspaper printing, bringing the Nanosolar product close to cost parity with traditional fossil-fuel based grid generation versus  traditional solar PV which is around 3 times more expensive.  The process is reliant on a ready supply of copper, indium, gallium and selenium (hence the acronym CIGS PV).  This brings us back to the point implicit within the FIT incentive (the bonus payment for exporting back into the grid): Namely energy efficiency is of utmost importance.  The supply of these essential metals and minerals is no more infinite than that of coal, oil or gas.  Today we face the challenges of peak oil – tomorrow peak indium... it would certainly threaten the production of flat screen televisions, of which it is a key component.

So we find ourselves having to acknowledge those didactic greens:  If we are going to live in a way that protects the planet and meets our needs without jeopardising those of future generations, then we need to start using less, of everything!

This need not be about hair shirts and sandals though.  In many ways it is about trying to enjoy the simple things in life and take a slower pace; spend less money on stuff we don’t need and be nicer to each other!  We could all do with a bit of that.....   

Link for FIT rates:

http://www.energysavingtrust.org.uk/Generate-your-own-energy/Sell-your-own-energy/Feed-in-Tariff-Clean-Energy-Cashback-scheme#tarifflevels

Links for arguments for and against FITs:

http://www.guardian.co.uk/commentisfree/2010/mar/01/solar-panel-feed-in-tariff

http://www.guardian.co.uk/environment/cif-green/2010/mar/09/george-monbiot-bet-solar-pv

http://www.jonathonporritt.com/pages/2010/03/the_war_of_words_over_homeprod.html

Link for Nanosolar:

http://www.nanosolar.com/

Link for doing and buying less and being nicer to each other!

http://www.wabisabi.org.uk/

http://cloudappreciationsociety.org/

©Mike Jacob 2010