Friday 28 September 2007

Good Energy doubles ‘pay back’ to 9p a unit

On 1st October Good Energy the 100% renewable electricity supplier is launching its new ‘pay-back’ tariff to its customers generating their own electricity. Good Energy will pay 9 pence for every unit their customers generate.

Good Energy, in their on going work to nudge the Government toward supporting renewable microgeneration, have taken the rumour that the Renewable Obligation Certificates may be doubled some time in 2009 and decided to offer essentially a double ROC rate from 1st October to people who sign up with their Home Generation product. Juliet Davenport, Chief Executive of Good Energy stated why the company is launching the new Home Generation product. “Good Energy believes that climate change is the biggest challenge we face as a society. 30% of the UK’s carbon emissions come from our homes - this is where we need solutions and home owners using wind, solar and wood energy are providing those solutions. Good Energy wants to actively support these home owners producing their own power and by offering the highest payment for electricity generated at home, that is exactly what we are aiming to do.”

The move to increase the support for microgeneration has been welcomed by environmental groups, John Sauven Executive Director of Greenpeace, said“Good Energy is showing the way with their new Home Generation scheme. The government is dragging its heels on climate change and its support for small scale renewables is shameful. Microgeneration in mainland Europe is booming - if they can do it so can we. The UK government should now follow the lead of Good Energy.”

One of the barriers to wide spread micro generation by home owners is the low level of return on particularly photovoltaic solar generation. Income from home generation at the moment is in three parts, firstly the cost saving, depending on your energy demands, and with wind and solar your location, the average house hold can expect to save between £90 and £120 per year off their bills, the second part is the ‘feed in’ component of selling electricity back to the grid, the third part of the Renewable Obligation Certificates were by home generators are rewarded for generating carbon free power.

Chris Goodall, in his book “How to Live a Low Carbon Life” calculates that the average return on a 2 kilo Watt system, around 12 square metres of panels, is around 4% a year. He calculates this by adding up the average amount saved by home generation, around £120 a year plus around £24 earned by feeding electricity back into the grid at present feed in prices of 4p, plus around £72 of Renewable Obligation Certificates. This gives around £216 of savings and revenue for an installation cost of £5000. Put in straight forward terms its gives around a 4% return over the 25 year life of the system based on present energy costs, ROC allowances and price, and feed in prices. With the Good Energy scheme the slight increase in ROC equivalent payments, averaging around £158, the payback rises to 5%.

According to anecdotal evidence from Solarcentury installing a solar system on a house should not just be seen as an investment in cleaner energy but also an investment in the capital worth of the building itself. The Energy Saving Trust estimate that a solar home is worth 10% more than a traditional home, Jerry Newman, COO of Solarcentury told naturalchoices in a recent interview “We already have seen that a home fitted with solar achieved an 8% higher price that an otherwise identical adjacent home”.

Which is very valuable given the Government’s vacillation on supporting home generation. Going back to Chris Goodall’s calculation the installation of a solar system, which he prices at £5,000 is in reality closer to £8,000. The price is brought down by the assumption that a grant from the Low Carbon Building Programme which has now been capped at £2,500. The programme has been suspended, played around with and is in fact barely functioning with a mere £19 million behind it this year. Seen in isolation without the increase in value to the home itself microgeneration would remain the domain of the convert and not a viable option for many who remain Return on Investment driven.

Sadly at this moment in time, despite the huge increase in interest in sustainable and low carbon homes, the Government has still to lay out a clear system of support, at a grant level, a feed in payment level or at a ROC level. Hopefully Good Energy’s initiative will go some way to providing an incentive to policy makes to pull their heads out of the sand and get behind renewable and home micro generation.

Peter Shield naturalchoices.co.uk
Good Energy press release

full article

1 comment:

Unknown said...

Dear NIC, thanks for re-publishing the article I wrote for naturalchoices.co.uk.
I have no problem with you half inching it despite my copyright however as a matter of politeness if nothing else it would be nice to have it accreditted to the source. A line such as, 'This first appeared on www.naturalchoices.co.uk' with a link to the site would be nice.
Kind Regards
Peter Shield
editor Naturalchoices.co.uk