A Guide To Feed-In Tariffs

The Feed-in Tariff Scheme is an important contribution to the decoupling of energy prices from fossil fuels. It has been established in 1998 with the aim of encouraging the development of small scale, renewable energy systems. The scheme encourages the development of “greener” means of providing energy. It is open to anyone who wishes to participate. Anyone can install a new or modified system, whether it is a new build or a modification of an existing system.

 

Advantages of feed-in tariffs

 

There are two types of renewable energy schemes that are available. The first, Home Energy Assessment Scheme (HEAS), requires the installation of certain energy efficient appliances and light fittings. The second, Personal Allowance Scheme (PAAS), requires only a modest change in lifestyle and the installation of modern light fittings and appliances. Both provide rebates on energy consumption.

Providing rebates is an important part of the scheme. If everyone who uses electricity used a home energy supplier who would pay a proportion of the cost of these supplies, as a way of encouraging people to use cheaper, more environmentally sound renewable energy sources. It should be noted, however, that the majority of people who take up the scheme to supply their own domestic energy do not follow through and obtain rebates.

There are several incentives for those willing to adopt renewable energy. First, the initial cost of setting up the new system is relatively small. In addition, the repayments are likely to be substantial once your energy efficiency is established. In addition, there is no cap on how much you can save. There are also no legal obligations to keep using renewable energy.

 

Disadvantages of feed-in tariffs

 

Those unable to install new renewable energy systems at their homes can make a further commitment. They can agree to a “feed in tariff”, which is similar to the Feed-in Tariff scheme. The only difference is that no initial cost is incurred by the person providing the renewable energy. They are only required to pay an annual rate, after which no further payments will be made.

As with all types of energy efficiency schemes, this one has its advantages and disadvantages. As with all types of energy efficiency schemes, those who are interested in taking up the scheme must be certain that they can afford it. There are also drawbacks, such as the fact that the tariffs are fixed, so that you cannot increase or decrease your tariff. Those who live on a small income or have neighbors who share their electricity supply might also find it difficult to implement the scheme in their circumstances.

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