And Britain will fully index the tariffs with inflation. This often overlooked aspect of the British program will significantly boost earnings by protecting investors from the ravages of inflation.
Britain has gone farther, faster than almost any other jurisdiction worldwide in moving to feed-in tariffs. From open ideological hostility to their new-found political embrace, the turn about has been striking and could offer the prospect for similarly rapid movement in North America.
Though Ontario had implemented a modest feed-in tariff program in 2006, the Canadian province moved swiftly when it decided to revamp the program. Ontario implemented its system of Advanced Renewable Tariffs, the most comprehensive in North America, in less than eight months, including public consultations and tariff price-setting.
However, critics charge that Britain's DECC has set its sights too low. The limitation of feed-in tariffs to a micro-generation "ghetto" remains troubling to many renewable energy advocates. Wind, solar PV, and hydro projects are limited to no more than 5 MW, or roughly two commercial wind turbines. Further, the tariff tranche for wind projects from 1.5 to 5 MW is so low that only the windiest sites in Britain will be suitable, raising concerns about more siting conflicts.
In a press release, Friends of the Earth's Dave Timms says, "The introduction of cash incentives to boost small scale green electricity generation is welcome, however, ministers have been far too timid with a policy that could make a significant contribution to cutting emissions and boosting energy security.
"Installing renewable technologies will now be a good investment for many homes, but farmers, businesses, communities and others will get little or no extra incentive to invest in clean electricity," Timms argues.
At the same time, the World Future Council's Miguel Mendonça says, "The UK is taking its first steps towards a policy environment which encourages citizens, farmers and others to become an active part of the climate change solution - and make a solid investment while doing so."
But Britain finds itself in an unenviable position. Heat is needed and the British Isles are at the end of the continent's natural gas pipelines. Coupled with the country's disastrous experiment with so-called market deregulation, Britain is vulnerable to gas shortages during the heating season.
In 2007 the Ontario Sustainable Energy Association (OSEA) recommended in its report Renewables without Limits that the Ontario Power Authority institute solar thermal tariffs of $0.20 CAD/kWh for residential solar thermal and $0.10 CAD/kWh for commercial solar thermal installations. OSEA's recommendation was not included in the recently launched Ontario feed-in tariff program. OSEA also recommended that OPA set a tariff for biogas pipeline injection. This feature was also not included in the new Ontario program.
Where Ontario hesitated, Britain acted. This one policy tweak could be the gem hidden in the British program. "This is a significant step forward that policymakers in northern climates should definitely be paying attention to" says Toby Couture, one of North America's foremost authorities on feed-in tariffs.
Once the laughing stock of the world's renewable energy community, Britain's new feed-in tariffs could finally put it back on the world stage alongside up and coming centers of renewable energy development such as Ontario and China.
For background on the policy, see Britain to Launch Innovative Feed-in Tariff Program in 2010.
DECC Press Release - Cash Rewards for Low Carbon Electricity and Heating
Consultation on Renewable Electricity Financial Incentives
FOE: Green electricity cash boost for homes and businesses - but overall ambition disappointing