Households and communities who install generating technologies such as small wind turbines and solar panels will from April be entitled to claim payments for the low carbon electricity they produce.

Energy and Climate Change Secretary Ed Miliband 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.

Mr Miliband said: "The guarantee of getting an income on top of saving on energy bills will be an incentive to householders and communities wanting to make the move to low carbon living.

-- Advertisement --

"The feed-in tariff will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past.

"It will also change the outlook for a range of industries, in particular those in the business of producing and installing small scale low carbon technology."

From 1 April householders and communities who install low carbon electricity technology such as solar photovoltaic (pv) panels and wind turbines up to 5 megawatts will be paid for the electricity they generate, even if they use it themselves. The level of payment depends on the technology and is linked to inflation.

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

A typical 2.5kW well sited solar pv installation could offer a homeowner a reward of up to £900 and save them £140 a year on their electricity bill.

Mr Miliband was speaking as he visited low income homes in Dagenham being helped by eaga’s Clean Energy for Social Housing project to make the move to microgeneration. The scheme offers free clean energy technology to tenants in social housing which will lower their electricity bills and carbon emissions.

(CD/GK)