Feed in Tariffs for Small Business with Renewable Energy
If you are a small business and want to cut back on your electricity costs and CO2 emissions then installing some form of small scale renewable energy source may be a solution to investigate.As from April 2010 a new feed in tariff (fit) is introduced that will pay households and small businesses who have a renewable energy source that produces under 5mw in capacity a rate per kwh produced whether you use the electricity or not.
The scheme is set to hone the German experience where currently 15% of all electrical power is generated from renewable green energy sources whereas the UK lags well behind at just 5.5%.
Investment is high – but getting lower
Up to now only specialised companies have been selling solar panels (PV – photovoltaic) and mini wind turbines but now the supermarkets have got into the act with Tesco now undercutting Sainsburys on price. Current estimates are that it can cost upwards of £10-£15,000 to have solar panels installed that have a capacity of 2-3mw with the current pay back on investment of 20 plus years so has put many people off especially as cheaper models are not made with such a high quality and would not last the 20 years in any case.
Feed in tariffs – what are they ?
The new feed in tariffs which come into force in April 2010 and are guaranteed until March 2012 actually pay the home or business a set rate per kwh produced whether or not they use the electricity themselves. The payment falls into two categories:
- The generation tariff – which pays a fixed amount based on what type of renewable energy source you have whether you use the electricity or not and a
- export tariff of 3p per kwh for any electricity you sell back to the national grid via your energy supplier for others to use
On top of the monetary payment you should also see your overall electricity bills reduce because you will of course be using the energy that’s being generated.
Anyone can now join the scheme so long as the solar panels or wind turbines are installed by qualified a Microgeneration Certification scheme (MCS) company or person and once you have these installed you need to contact your energy supplier so they can set up and pay you the rates in question.
What are the feed in tariff rates
The following table shows the rates of pay under the generation scheme and are guaranteed until 31st March whereby they will gradually be reduced for new homes and businesses. The tariffs below are fixed for 20 to 25 years depending on the technology you are using and increase each year based on the retail price index.
- Solar electricity (PV) ≤4 kW (retro fit) 41.3p / kwh
- Solar electricity (PV) ≤4 kW (new build) 36.1p / kwh
- Wind ≤1.5 kW 34.5p / kwh
- Wind >1.5 – 15 kW 26.7p / kwh
- Micro CHP ≤2kW 10p / kwh
- Hydroelectricity ≤15 kW 19.9p / kwh
If you are thinking of taking advantage of the feed in tariff rates for your small business it’s worth speaking to a specialised company and planning the investment versus the pay back period and financial values in total for the entire project first.
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