By Hugo House

Using microgeneration technology to produce heat and power at home could deliver large amounts of energy, help increase the UK’s energy security, reduce our carbon emissions and have a positive influence on consumer behaviour towards energy use.

So why are only around 100,000 homes in the UK generating energy using micro-scale renewable technologies? This is what we’ll have a crack at answering here, and hopefully dispelling some myths. At Good Energy we’ve developed a wealth of expertise and experience in this field as we’ve been successfully encouraging our customers to become generators. So much so that one in 25 of our customers is now a renewable energy generator. We help them along every step of the way, from choosing products to selling their power.

The majority of these sites are using solar heating. The rate of adoption of technologies that generate electricity is far lower, especially when compared to other European states such as Germany.

We believe that the slow uptake of microgeneration in the UK is due to several barriers:

• remuneration, which challenges the economic viability of projects;
• finance, where homeowners are unable to access the capital to fund a project;
• planning, where the knowledge of planning departments and the processes they follow are not adequately developed;
• access to information, where the homeowner struggles to find the information to identify the right solution for their home; and
• consumer confidence, where homeowners do not have the confidence to pursue a microgeneration project because quality assurance for microgeneration projects and installation companies has been hard to identify.

In a 4 part series we’ll deal with these issues one by one.

It’s worth noting first though that things are getting better as some of these barriers are starting to come down. In principle, the introduction of the Feed-in Tariff will ease the economic barrier, allowing many homeowners to install microgeneration systems and receive an attractive return on their investment.

Planning has also improved. Permitted Development Orders are helping streamline planning applications for many homeowners.

However, obstacles still remain - and we believe these need to be addressed if the government’s target of 750,000 microgenerators is to be met.

Lets take a look in more detail at overcoming the remuneration issue. 

Week 1 - Remuneration

Money money money. While the economics of microgeneration may be less attractive than large scale commercial projects, there are still plenty of people that are willing to invest in small-scale projects.

To date, microgenerators have been motivated primarily by

• a commitment to conserving the environment and wanting to reduce their carbon footprint; and/or
• a commitment to self sufficiency wanting to reduce their reliance on companies providing them products such as heating fuels and electricity (energy security).

Until the announcement of the Feed-in Tariffs, very few people adopted microgeneration for purely economic reasons – one reason why the uptake of microgeneration in the UK has been low.

There are two great macro-economic advantages in stimulating people to invest in their own heat and power generating systems. By encouraging people to spend their own money on generation that can meet a significant proportion of the UK’s energy needs for the next 20 years, the government has less need to subsidise large scale, centralised energy systems. That stimulation then creates ‘green collar’ jobs as manufacturers, consultants, installers and after-sales service providers are all required to support a growing microgeneration industry.

The launch of the Feed-in Tariff brings the UK a significant step closer to triggering meaningful growth in the microgeneration industry. Developing an appropriate Feed-in Tariff wouldn’t have been possible without the wealth and depth of expertise that the industry has acquired thanks to the pioneering early adopters of microgeneration systems.

The government’s decision to exclude the early adopters from the full rates of the Feed-in Tariff has been met with disbelief and outrage throughout the industry. Our own based on the projected growth of microgeneration under the Feed-in Tariff indicate that offering the early adopters the full rates of the Feed-in Tariff would increase the cost of operating the Feed-in Tariff over its lifetime by less than one percent.

While we recognise the economic argument in favour of incentivising new rather than rewarding old microgenerators, we think there is a fundamental and dangerous flaw that has the potential to damage the ongoing progress and improvement of this country:

If people feel they risk being penalised through exclusion from benefits that others will be entitled to simply because they are early adopters of a ‘new way’ then we are in danger of breeding out the pioneers from our society. If, as a nation, we lose our shepherds, the government alone will not be able to guide the sheep.

Good Energy believes that the UK’s existing microgenerators should have their remuneration under the Feed-in Tariff increased to a rate that is accepted as fair and reasonable by the microgeneration community. This is not just to benefit those microgenerators but also to reassure the UK’s more innovative and progressive citizens – a vital national asset.

So, we’ve launched a campaign and so far 74 MPs have signed an EDM giving us backing.

We will be offering a Feed-in Tariff payment to our customers on April 1st when it comes into play. We are also one step ahead of the government by offering a payback scheme for renewable heating with our HotRocs scheme.

Next week we will look at financing renewable energy projects…