Feed-in-Tariff The much-discussed feed-in tariff, employed as a

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The much-discussed ‘feed-in tariff’, employed as a way of creating growth in the PV industry and
installation rate across Europe, has finally arrived in the UK – almost.

The Government has introduced and passed an amendment to the Energy Bill in November 2008
which stipulates that a feed-in-tariff mechanism must be implemented in the UK by April 2010.

In a statement given at the time, John Sauven, executive director of Greenpeace said: "At last the
Government is giving in to common sense. Feed-in tariffs have been proven the world over to be the
most effective and economic way of creating a successful renewables sector.”

What this means to consumers is this: renewable electricity produced by solar photovoltaic panels
will attract an increased rate when sold to electricity companies via the National Grid. The rate has
not yet been set by the government, and we await this development with some interest.

The models used across the rest of Europe are variations on a common theme; namely that a
preferential rate is paid for each unit (kWh) sold, under a contract lasting between 3 and 20 years,
with the payback rate slowly diminishing over the contract period. This gives the greatest payback
during the initial period after installation is completed.

Many farmers have got involved, thanks to the large roof spaces their barns present, and the return
on investment that allows them to cover costs in as few as 8 years, and go-on creating an income for
remainder of the panel life – up to 30 years.

The EU average price per unit, under the feed-in-tariff arrangements, is £0.31 per kWh. This would
mean a 1kWp hybrid system in the ideal location in the South West, could yield up to £310 per year
– a return on investment of over 5%. The system would also avoid the VAT levied on the 1000kWh
non-imported potential annual yield.

Whatever happens, the feed-in-tariff system will be absolutely key to the development of a truly
low-carbon and local, renewable energy industry in the UK.

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