Make your own energy to lower bills and earn cash, promises a new government scheme.
What is the Clean Energy Cashback?
The government will pay individual homes, businesses and communities for generating green electricity from renewable energy systems on their property. This includes solar panels and small hydro and wind turbines up to 5MW.
Adding solar panels to your home is one
way to try and reduce your bills.
This is known as the Clean Energy Cashback scheme (CEC) or Feed-In Tariffs (FIT).
It starts on the 1st of April 2010.
Why?
The aim of the payments is to entice more people to install these clean microgenerators.
The UK gets about 5.5% of its electricity from renewable sources, ranking it a lowly 25th out of 27 EU countries. In order to hit green targets in 10 years' time, this must rise to 30%.
Eligible technologies
You can get the CEC for installing the following small-scale technologies:
Use the Energy Saving Trust's home energy generation selector tool to help you decide which technology is suitable for your home.
Payback
Ways to save and earn
Go green and save?
- You can use the electricity you generate yourself, meaning you don't have to pay a supplier for it.
- Your electricity supplier pays you for each unit of energy you generate, whether you use it or not.
- You send any electricity you don't use back to the grid and get paid an export tariff for it.
You will get paid directly by your existing electricity supplier, but the payments will be overseen by the regulator Ofgem.
You can still import electricity from the grid when you need additional power.
Tariffs
Tariff levels vary depending on the installation and the energy company. The scheme is retrospective and installations completed between the 15th of July 2009 and the 31st of March 2012 will earn the most.
For example, a typical home installing solar panels before the end of March 2012 at an average cost of between £8,000 and £14,000, could expect to earn around £840 annually.
Generation and export tariffs will rise in line with inflation.
From 1st April 2012 the rates will decrease each year for new entrants to the scheme.
Please note that these tariffs only apply to England, Wales and Scotland. Northern Ireland has not yet taken a decision on feed-in tariffs.
Disadvantages?
Installing these technologies can be an expensive business. Government grants are no longer available for electricity microgenerator installation.
Some, including Friends of the Earth, have criticised the payments as too low. They are especially low for installations completed before the 15th of July 2009.
Matt Clear, from the Which? Home, Health and Environment Research Group, is among the experts that see room for improvement in the scheme. He says: "The cut-off date for defining what is an existing installation seems to be arbitrary, so early adopters have been penalised. We're also concerned that the rates of feed-in tariffs seem low, and that the issue of the large upfront cost of solar panels hasn't been addressed. We're looking into this and other issues around microgeneration."
Already have an electricity microgeneration system?
If you want to get paid under the CEC for a microgenerator installed before the 15th of July 2009, you need to take action now. What you need to do depends on when you installed it and whether it is certified under an earlier scheme called the Renewables Obligation (RO).
If your installation was:
- installed and got RO accreditation before the 15th of July 2009, you need to transfer it to the CEC to continue getting financial support for it. You will receive a lower tariff than newer CEC users, at about the same rate as you got under the RO scheme (9p/kWh).
- installed before 15th July 2009 but not RO accredited, you need to apply for RO accreditation before the 1st of April 2010 in order to then be eligible for the CEC. Contact Ofgem as soon as possible so you don't miss out. The tariff will be 9p/kWh.
For further information on these processes visit the Ofgem website.
Technologies with a capacity of up to 5MW
are eligible for feed-in tariffs.
How to get involved
1. Decide which technology is suitable for your home using this tool on the Energy Saving Trust's website.
2. Check with your energy supplier that you would be eligible for the tariff and note any conditions. If they require your generator to have a meter, they may be able to cover the cost of buying and installing it.
3. Install the technology. You can search by area for products and installers approved by the Microgeneration Certification Scheme (MCS).
4. Once installed, notify your energy supplier.
5. You receive the Clean Energy Cashback.
There are lots of rules surrounding the CEC. For more detailed information see the Energy Saving Trust website.
Which? Switch
You may be able to save money without installing anything. Which? Switch found that people switching their gas and electricity provider through them saved an average of £263* on their annual energy bills.
Up next
2011 sees the introduction of the Renewable Heat Incentive (RHI). This also uses payment to encourage heat generation from renewable sources at all scales. Government grants to help with start-up costs for this type of microgeneration are currently still available.
*Average annual saving per household that switched to a dual fuel tariff via our Which? Switch service between 1st January and 21st October 2009.