Payment for homemade power ‘too low to help’

Robin Pagnamenta, Energy Editor

New subsidies to encourage millions of British families to install roof-top wind turbines and solar panels were unveiled by the Government yesterday, but were criticised as too low to help to meet its ambitious targets for low-carbon energy production.
Ed Miliband, the Energy and Climate Change Secretary, said that by 2020 a tenth of British households would be generating their own green elecricity under the scheme, the Feed-in Tariff, which will take effect in April.
The scheme will reward households, communities and businesses generating electricity from wind turbines, hydro-electricity schemes or solar photovoltaic panels by paying an above-market rate for power they produce. Homeowners using photovoltaic panels to generate electricity could earn £900 a year and cut bills by £140.
However, critics said that the scheme’s average returns on investment, of 5 to 8 per cent, were too low to encourage its mass adoption. They said that returns were significantly below the 10 per cent average in Germany, where similar arrangements have led to a big expansion of renewable energy.

Alan John, of Osborne Clarke, the law firm, said: “Householders may still regard the initial outlay to purchase a low-carbon energy-generation system as being prohibitive. Installing a typical 2kW photovoltaic domestic system, for instance, currently costs in the region of £10,000.”
Dave Timms, of Friends of the Earth, said: “Ministers have been far too timid with a policy that could make a significant contribution to cutting emissions and boosting energy security.”
Mr Miliband rejected such concerns, saying that the scheme had a “very significant scale of ambition”, similar to other countries that have adopted similar arrangements. “The feed-in tariff will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past,” he said.
Britain aims to cut its emissions of carbon dioxide by a third by 2020.