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Cash-back system to boost demand for solar and wind energy systems

Cumbria-based Sundog Energy, one of the UK’s leading providers of solar photovoltaic (PV) and small scale wind energy systems, is preparing for a big increase in business following the unveiling by Energy Secretary Ed Miliband of the UK Low Carbon Transition Plan.

A key part of the Government’s proposal is the introduction of a new feed-in tariff (the renewable energy cash back scheme). This will give owners of renewable energy systems a guaranteed income for the electricity they generate. For example, the proposed payment for electricity generated by certain solar photovoltaic (PV) systems will be 36.5p per unit plus an additional 5p for each surplus unit that is exported to the national grid.

The Government hopes that the new strategy will pave the way for a low carbon energy revolution in the UK, helping to meet its target to support 1.5 million households to generate their own clean energy. It aims to achieve around 15% of the UK’s annual carbon emissions cuts between now and 2020 by making homes more efficient and supporting small scale renewable energy.

Martin Cotterell, Managing Director of Sundog Energy, said, "This proposal provides a fantastic opportunity for homeowners, communities, businesses and the public sector alike to install solar PV or wind systems and to cash in on the green electricity they generate. Not only will they be paid for the electricity they export to the grid, but they will even be paid handsomely for the electricity they use. This proposal will radically change the economics of renewable energy, bringing down the time it takes a system to pay for itself, after which it becomes a net earner.

"Homeowners are expected to be eligible for Government grants of up to £2,500 for the installation of solar and wind energy systems until March 2010 (when the grant scheme closes) and still to receive the feed-in tariff" he continued, "although many projects that have already been installed with grant funding are unlikely to qualify for the payments".

The Government announcement has been welcomed by the small-scale renewables industry, although many feel that the proposed payment rates are not high enough to persuade people to invest in renewable energy systems. Germany by contrast, introduced a feed-in tariff with higher payments in 2000 and since 2004 has boasted the highest rate of solar PV installations of any country in the world.

Responding to Ed Miliband’s announcement, Gaynor Hartnell, of the Renewable Energy Association, which represents most UK installers, said ‘The renewables industry has had a tough time in the UK for many years and it has missed out on technologies where it should have led the world. What we heard from Mr Miliband today shows a level of understanding and political leadership that suggests that may be about to change."
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