Tuesday, 3 January 2012

What are feed-in tariffs?

What are feed-in tariffs?
Basically, a feed-in tariff is a fee paid by the government to groups/individuals for generating their own electricity (even if these groups/individuals use the electricity themselves). They were announced by Labour in 2008 but actually introduced under the coalition April 2010. The idea is that individuals or groups of individuals clubbing together, can install solar panels or wind turbines on their property. It is hoped that this will help the government reach its renewables target.

Individuals originally got around 40p per kWh of energy produced. For some, this meant a tax-free fee of around £1000 per year. Cameronites saw it as a way of matching green energy production with the promotion of the big society and localism agendas ( i.e. individuals, charities and communities taking on the burdens of the state/private companies). Many environmentalist groups welcomed the development, however other environmentalists such as George Monbiot were deeply critical of the idea, claiming it is an inefficient, gimmicky way of producing renewables. Perhaps it also links in with Vince Cable's joke that some of the coalition's policies were chaotic and Maoist. Chairman Mao (dictator of China '40s-'70s) used to promote industrialisation by forcing peasants to smelt tiny amounts of iron in their backyards.


Even more

Why is it in the news Dec 2011?
In October 2011 the coalition more or less halved the feed in tariff (for around 40p per kWh to around 20p per kWh). Parliamentary select committees have been critical of this.

Friends of the Earth and two solar panel companies ( who stand to lose business because of the loss of incentive to buy the panels) took the government to court for breaching their own consultation rules on the matter. whilst you were busy doing your Christmas shopping, the High Court ruled in favour of friends of the Earth/ the Solar companies. It is currently too soon to say, but:

The ruling opens the door for a judicial review that could force the government to delay its plans, potentially allowing thousands more people to claim the higher subsidy.


Updates on this issue may appear here.

All of this seems to add to an overall picture that the so-called "greenest government in history" are clearly prioritising cutting the deficit and placating the international financial community above sticking to their own green plans. Whether or not this is the right thing to do depends on who you ask.

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