RHI and FiTs: the unintended consequences of penalising green energy ‘early adopters’
Anyone who was brave enough (or stupid enough) to invest in on-site renewable technologies before July 15 2009 will not have forgotten the disappointment and sense of injustice when they discovered they were going to be ‘penalised’ for their efforts under the Feed-in Tariff (FiT), the Government’s mechanism for incentivising small-scale renewable electricity. Due to the cost of the scheme, the Labour Government at the time said ‘early adopters’ would be frozen out of the scheme entirely. As it turned out, things didn’t work out half as bad because the Tories stuck to their election pledge and changed the regulation when they came into power (back then they were still trying to convince electors they had a green agenda). This meant households and businesses that installed their technology prior to July 15 2009 were offered less than half the generation tariff of new installations.
Better than nothing?
For some, yes. But others – myself included – got caught out by what can only generously be described as the unintended consequences of poor regulation, for I’m sure the bureaucrats who came up with the FiT mechanism did not intentionally plan to have renewable electricity going to waste. Or for bits of perfectly good kit to be ‘dumped’ in order to install newer technologies that qualify for subsidies – as appears to be the case with the FiT’s younger sister, the Renewable Heat Incentive (RHI).
In my case, where the developer of a block of eco flats I live in failed to register for the Renewable Obligation (yes, that’s another renewable energy subsidy mechanism that predates the FiT - are you still keeping up?), the owners have been unable to subsequently apply for the FiT. And it seems many others that were registered under the old RO, were unsuccessful in getting FiT registered, simply because they missed the application deadline!
That’s not the end of the story either, because as well as losing out on the generation tariff, people like me can’t even sell our green energy back to the grid because we don’t qualify for the export tariff either. So all those daylight hours I’m out working, my solar energy is going to waste – I certainly didn’t read that it in the small print when I signed up to a greener lifestyle!
But if you think that sounds ridiculous, what about the idea of throwing out a renewable heating system that is in perfectly good working order because of a green regulation that says your system was installed before the approval date? Because, while renewable heating systems on businesses premises are eligible for the Government’s RHI (domestic installations have yet to qualify), just like the FiT, it’s only those installed after July 15 2009 that can apply.
According to officials at the Department of Energy and Climate Change (DECC), which came up with the mechanism, the RHI tariffs are, “only intended to provide for the extra cost of a renewable above fossil fuel heating rather than all of the cost. Therefore, we would not expect someone to recoup all their costs in the scenario where they replace functional renewable heating”.
Is that so?
Well, I’ve got it on good authority from a leading biomass boiler installer that companies are doing just that; replacing their old systems with a new boiler in order to benefit from the RHI. Now, you might question those companies’ green credentials, but you might also question a regulation that encourages such practices.
When I put the question to a DECC spokesperson, this is the response I got: “The RHI is intended to incentivise the installation of new renewable heat equipment rather than as a reward to those early adopters who have chosen to install in the past.”
The trouble with this position is that ‘early adopters’ aren’t seeking “rewards” but simply asking for a level playing field – otherwise the unintended consequences are they will be disincentived from leading greener lifestyles.