‘Cash for energy’ hopefuls urged to act fast

The Financial Times Money section has been looking at ‘Green Energy’ investments and the government’s Feed In Tariff.

Apparently the government has said that it is going to review the scheme in 2012, so there might be a short-lived “window of opportunity” for investments in green generation, if grants then drop (as expected) from 2013.

The Feed-In Tariff currently offers the following rates in pence per kilowatt hour (range)

  • Small wind turbines 24.1 – 34.5 pence/kWh
  • Large wind turbines 4.5 – 9.4
  • Solar panels 29.3 – 41.3
  • Small hydroelectric 4.5 – 19.9
  • Waste digestion 9 – 11.5

In summary, the FT says that Solar Photovoltaics (PV) typically cost around £10,000 for a residential house and offer a financial return of 7% per year. Larger, ground-based systems can generate returns of 12%. Try getting that from your bank at the moment!!

But apparently this is the lowest financial return of all the options in the FIT scheme.

Wind power can provide returns of up to 20%, and while a domestic pole-mounted 6kW turbine would cost around £22,500 to install, annual income would be around £3,200 so the system would pay for itself in seven years. Do beware though — from what I have heard so far, Farnham is not a good place for wind energy. Too far from the sea and the hills.

Hydroelectricity apparently offers returns of 10% to 18% pa, but a ‘small’ scheme would require a drop in height of two metres and a significant flow of water. And an investment in the order of £200,000.

This means the hydro scheme would pay for itself in around five years, whereas an ‘Anaerobic Digester’ (using a form of airless composting to create biogas) has a payback period of six years, generating annual returns of 12%. But you’d need around £1.2m to build a 370kW plant, plus daily management and operations. Still, as Tom worked out, we spend over £40m a year on energy in Farnham, so we could easily afford to build a plant like this as a community.

And apparently from 2011 there will also be grants for the installers of woodchip heat plants (like the ones recently installed by two schools in Bordon) and for ‘solar thermal’ panels (the ones that heat your hot water). But details of the financial returns on these are not yet available.

To see which technologies might suit your property use the Energy Saving Trust’s Home Energy Generation Selector tool – www.energysavingtrust.org.uk/renewableselector/start.

For more information see the FT article: http://www.ft.com/cms/s/2/79d4bb38-e8e9-11df-a383-00144feab49a.html?ftcamp=rss&ftcamp=crm/email/2010118/nbe/YourHome/product#axzz14nsPF6yk


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