The new Feed-in Tariff – A tax on Northerners?

James Lovelock has questioned whether people have the intelligence to deal with a concept as complicated as climate change. Creating workable and effective policies in this area is certainly daunting, as Government is increasingly discovering. As their policies start to be implemented, I thought it would be a good time to reflect on the strengths and weaknesses of different approaches – starting with the recently introduced Feed-in-Tariff.

A generous tariff


Since its introduction, hardly a week has gone by without an organisation contacting us with a Blackadder-style cunning plan to make money from the new Feed-in Tariff.

Fundamentally, organisations have worked out that the Government has got its sums wrong and that the tariff is far too generous if certain criteria are followed by the installers.

They have calculated that panels need to be installed in the south or south-west to make a serious profit. They need to be able to install the panels quickly, at a reasonable scale and facing south.

They also need to sign a 25 year agreement with the organisation or person who is having the panels installed on their land or property.

If they meet these criteria, organisations have calculated that they can cover the capital costs of the installation themselves, provide free or discounted electricity and be able to start to generate a profit on their investment after six to eight years.

The economics of the tariff have resulted in a plethora of initiatives. For instance, owners of land in the south-west from farmers to industrial sites are being asked to rent their land for panels. Cornwall County Council is aware of at least 30 developers who have approached organisations in the county.
Homeowners in the south-west are being approached with an offer of free panels and discounted electricity if they make their roof space available for a 25 year period. Housing Associations and other community buildings are also being approached with an offer of free or discounted electricity in return for their roof space.

Good intentions but...


The Feed-in Tariff was introduced by Government with all the right intentions but the reality is certainly not quite what they expected. Clearly the tariff is socially unjust.

It penalises people in the north, people who do not own sufficiently large enough roof areas to interest the installers and those who are not in a position to make a 25 year commitment.

Environmentally the tariff will have some negative implications. The offer of free or discounted electricity reduces an economic driver for energy efficiency. There are implications linked to putting panels on agricultural land.

Nobody has looked at the impact on soil erosion, flood run-off, the aesthetics, or the fact that it might decrease the amount of land desperately needed for growing food.
View the original article here