Energy and Climate Change Secretary Ed Miliband today announced the feed-in tariff (FITs) levels and also published a blueprint for a similar scheme to be introduced in April 2011 to incentivise low carbon heating technologies. The renewable heat incentive (RHI) will be a world first.

The schemes are designed to bring about a significant increase in the amount of locally produced green energy, as a contribution to the wider shift of the energy mix to low carbon.
From 1 April householders and communities who install low carbon electricity technology such as solar photovoltaic (PV) panels will be paid for the electricity they generate, even if they use it themselves.

They will get a further payment for any electricity they feed into the grid. These payments will be in addition to benefiting from reduced bills as they reduce the need to buy electricity.

The level of payment depends on the technology and is linked to inflation.

The scheme will also apply to installations commissioned since July 2008 when the policy was announced.

Below are the tariff levels for new PV installations:

The amount you are paid will depend on when you have your system installed. The tariffs are set for the first two years but are set to reduce year on year after that. This is to try and encourage people to get their systems installed sooner rather than later. The rate at which join the scheme will be set for 25 years.

Year 1 & Year 2 (1st April 2010 – 31st March 2012)

• PV Systems up to 4kWp (retrofit): 41.3p per kW
• PV Systems up to 4kWp (new build) : 36.1p per kW
• PV Systems from 4kWp - 10kWp: 36.1p per kW
• PV Systems from 10kWp - 100kWp: 31.4p per kW
• PV Systems from 100kWp - 5MW: 29.3p per kW
• Stand alone systems (non-grid connected): 29.3p per kW

Year 3 (1st April 2012 – 31st March 2013)

• PV Systems up to 4kWp (retrofit): 37.8p per kW
• PV Systems up to 4kWp (new build) : 36.1p per kW
• PV Systems from 4kWp - 10kWp: 33p per kW
• PV Systems from 10kWp - 100kWp: 28.7p per kW
• PV Systems from 100kWp - 5MW: 26.8p per kW
• Stand alone systems (non-grid connected): 26.8p per kW

Tariffs will be inflated annually. The tariff levels for the electricity financial incentives (pence) are calculated to offer between 5-8% return on initial investment.
Ofgem will administer the feed-in tariff scheme and suppliers will be responsible to paying the reward to their customers.

Householders and communities can apply for the feed-in tariff from their electricity supplier from April 2010.

Current figures for renewables:

The UK currently gets around 5.5% of electricity from renewable sources and that will need to increase to around 30% to meet the 15% 2020 target for all energy.

Modelling show that small scale renewable installations could meet 2% of electricity demand in 2020.

The UK currently gets less than 1% of heat from renewable sources. This will need to rise to around 12% in order to meet the 15% 2020 target for all energy.