Feed-in tariff in the UK

The goal is that small generation should meet 2% of the national electricity demand. The United Kingdom will introduce feed-in tariffs for electricity and heat production from small renewable energy plants (anaerobic digesters, mini-hydro, photovoltaic and small wind turbines for electricity production, biomass, heat pumps and solar heating panels).

Wind energy is set to get from 4.5 pence to 34.5 pence per kilowatt hour, making wind turbines an attractive proposition for everyone with a good location. UK is the world’s second biggest small wind power market, equating to 25% of global demand.

This measure, long since awaited and requested by small and medium renewable energy industries, has been postponed several times, mainly because of pressure from the large industry.

The United Kingdom, like the United States, has never been willing to introduce feed-in tariffs for renewable energy sources, and has instead chosen to apply the scheme known as Renewables Obligation (RO), which favours large-scale installations.

The new feed-in tariff program will be enforced on April 1st. 2010 and will apply retroactively to all small renewable power technologies installed after July 2008, even if with lower rates.

Incentives will be based on the technology that is used and on the size of the installations, for a 20 to 25 year period (10 years only for cogeneration plants).

The plan is designed to provide a yearly 5-8% return on the initial investment. The goal is to generate 2% of electricity needs from renewable sources.

Experts believe that the measure will especially encourage British small wind power manufacturers, who already hold a major share of the European market.