Naturally the question following the closure of the FIT scheme is ‘are there any opportunities left for small scale renewable generators?’ and happily the answer is, yes.
During the past decade capital costs for wind turbines and in particular solar PV, have fallen significantly, meaning that if the majority of the energy generated is used on site the investment is more than likely to be worthwhile.
The main question in the absence of the FIT is how is the owner of a scheme paid? Inevitably not all the power generated on site will be used on site and some of it will be exported onto the grid. The FIT scheme provided a mechanism for payment of this power, but this route stopped with the schemes closure. The Government is working on a solution which it has called the 'Smart Export Guarantee'.
The Smart Export Guarantee will create value for exported power and is intended to provide a stepping stone ‘which can help unlock technological innovations like home energy storage and more efficient electric vehicle charging’, but we await a start date for the new scheme.
Or will we? The private sector is coming up with its own solution. Octopus and E.ON have both launched new tariffs which pay customers for excess power. Through its ‘Outgoing Octopus’ tariff Octopus is reported to be offering a flat rate of 5.5p.kWh or a variable rate based on the whole sale spot market, while E.ON is offering a rate in line with the FIT’s export rate of 5.24p/kWh.
We shall have to wait and see whether these will hold up to the volatility of the wholesale market.
Contact Savills Energy