Selling Energy to the Grid
The answer is almost invariably Yes. Grid operators have been compelled by Government legislation to allow export to the grid for some years. Unfortunately they have not been compelled to pay a good price for it.
The only alternative is to store your electricity on site, in batteries. Batteries will add significantly to the capital cost of the project, require maintenance, have a relatively short life and present a disposal problem. If exporting to the grid is available as an option it is the only option that makes financial and ecological sense.
ROC’s
These are Renewable Obligation Certificates. Anyone producing electricity from a renewable source (wind or hydro) will be issued a number of ROC’s from Ofgen equivalent to the amount of electricity they produce. ROC’s have a value and can be sold to energy supply companies (Npower, EDF, etc.). The energy companies are obliged by EU legislation to produce a proportion of the energy they sell from zero carbon sources. They are all significantly below that target and therefore buy zero carbon energy from micro-generators.
The current value of a ROC is about 5p per kWh or £50 per MWh. That is for the electricity produced, NOT the electricity exported to the grid. The electricity exported is also sold (now about 9p per kWh), giving a total return of about 14p per kWh exported.
As of Arpil 2009 double ROC’s for systems under 50kW capacity are being issued, which increases the value of exported electricty to baout 19p. The Government made a commitment in January 2009 that ROC’s will remain in place until 2027 for micro-generators, but said nothing about double ROC’s remaining in place.
HotROC’s
The 2008 Energy Act provides for what are being called HotROC’s. That is for heat produced from zero carbon sources, solar, biomass and biofuel. Clearly heat cannot be exported so this is in effect a payment to encourage domestic users to switch to zero carbon heating sources. The Government's recent White Paper sets out that HotRoc's will be worth 2p per kWh, starting in April 2011.
Feed-in Tariff
The 2008 Energy Act also provides for feed-in tariffs, which are a Government set rate for zero carbon electricity supplied (fed-in) to the grid. Currently the energy companies set the rate in annual auctions. As of (possibly) August 2009 that will change. As of April 2009 the Government is in negotiation with the energy companies over what the rate will be. In July 2009 the Government issued a White Paper setting out its intentions for feed-in tariffs. This sets out that :-
1. All new micro generators with system capacity under 50kW will automatically move to feed-in tariff (with no ROC) and will receive the rates as set out - varying from 12p for hydro to 36.5p for solar PV
2. Generator over 50kW can choose to move to feed-in tariff or continue on the pre-existing ROC scheme
3. Existing micro generators under 50kW capacity will move to a feed-in tariff of 9p per kWh, irrespective of which technology they have (campaigns are already under weigh to combat this - see YouGen at http://www.yougen.co.uk)
The White Paper sets out that feed-in tariffs will degress over time - 7% p.a. for solar PV, 4% for small wind and 3% for large wind, 0% for all the rest.
Conclusion
What this all means is that renewable energy has become a commercial investment decision. It now has the potential to be an income stream and the land or homeowner needs to consider it with the same attention that any other commercial investment would warrant.
This page was last modified on 21 August 2009 14:01