We’ve had a wood-burning stove in our house for the better part of 20 years. It’s incredibly effective and is in fact so good I’m looking seriously at fitting another one in my office to use during the winter instead of having to run the oil-fired central heating system.
I love them. Apart from being incredibly efficient in terms of the heat they chuck out, without wishing to sound like an interior designer, they also provide an attractive focal point to any room and actually smell rather pleasant as well.
Ours does not heat the water, but there are versions that do. Of course, that makes them a little more expensive because they need plumbing in. Some can also be used to drive your central heating.
So, I am pretty much sold on the general idea of using a renewable fuel to help heat our house, especially given that from a financial standpoint fitting our stove was a relatively painless affair.
I was, therefore, already a convert when I set out recently to attend an exhibition of domestic renewable energy. To ensure I was also properly briefed, I read again the information released by government regarding the feed-in tariff, which is effectively a financial subsidy for renewable electricity generators below 5mW (megawatts).
Currently, the feed-in tariff arrangements cover wind, anaerobic digestion, solar and small hydro power plant technologies. Presumably, other technologies may be included as they are developed.
In practice, what this means for householders is that they can sell the excess electricity they generate to the grid at a range of tariffs. According to Community Energy Scotland “this financial incentive is aimed to give a return of 5-8% on well sited installations based on a UK average resource and UK average installed costs”.
In addition, the life of the tariff is 20-25 years and it will be index linked to the Retail Price Index (RPI).
Sounds good, doesn’t it? Certainly, most people won’t see anything like 5-8% on their savings for a long time to come, so the idea of installing a renewable energy generator of some sort seems like a cracking idea.
But, hang on . . . the scheme has problems. There’s no doubt that you could make money out of this. And, if you have a site with a good wind resource for putting up a wind turbine or two, or you have a river with a reliable water flow so you can instal a micro hydro-electric system, then the chances are that you should be able to generate a reasonable income.
But how many people have access to such a site? Not that many, I think.
If you are fortunate to own a small estate with access to wind, water and maybe even manure, then perhaps you should consider the idea of generating all your own electricity and selling the excess. However, if you live in a semi in Aberdeen then this really isn’t for you.
Those who should look at this idea with some seriousness are small rural communities that might be able to raise the capital between them and put in the effort to construct their own schemes.
The capital needed is, of course, in itself problematic. Its hard enough for large projects in this age of austerity and tight-fisted banks – but smaller projects may really struggle. Grants are limited.
By now you will all be thinking I’ve got a new job sponsoring government renewables schemes. Far from it, although I bet the day-rate would be good. No, what I find really interesting about this scheme is the cost of installing the equipment that you need.
When I say interesting I really mean absolutely horrifying. For example, a 2.5kilowatt (two-ish bar electric fire size) wind turbine will, on average, set you back about £12,000 – excluding, of course, the dreaded Vat and the cost of installation.
That is the price of a small car but much less complex.
At full chat, a 2kW wind turbine may provide enough power to run a three bedroom house – just. But if you want to play safe, share a turbine with your neighbour, or sell a lot more back to the grid, then you could put up a 6kW turbine. That will set you back a mere £25,000 or more – or two small cars.
Micro hydro units will cost you as much, if not more, due to the amount of groundworks involved. The cost of solar is fairly similar, if you look at it on a like-for-like basis.
So, this stuff is not in any sense cheap. To roll it out across the population will not be easy, more likely impossible.
If we look at domestic heating alternatives such as wood pellet boilers, ground or air source heat pumps or even so-called passive solar for water heating then the situation is just as horrifying.
At the exhibition I asked for a rough quote on installing a wood pellet boiler. £12,000 was the answer. That’s exactly twelve times what I paid six months ago for a nice new condensing oil-fired burner.
For an air source heat pump system I was quoted £6,000 but was told it was advisable to keep my oil boiler as well for really cold weather.
For a passive solar panel including installation I was told that I could expect to pay anything up to £8,000. Oh, and that was even though they came from China.
So what do I conclude from all this? Well, it’s easy, really. I think that some companies are probably playing the “green premium” game.
If prices were lower then, of course, we would not really need incentives such as feed-in tariffs to persuade us that using any of these forms of domestic electricity generation or renewable heat systems was a sensible and economically beneficial idea.
So, this is “rock and a hard place” country. We need to sell more systems to get the prices down, but if we sell them more cheaply now then companies could go bust.
But what if we can’t get the prices down? Is there a market saturation limit that will be reached once those that can afford the technology have already installed it?
At the moment, market penetration in the UK is very low. Will it improve as conventional energy prices rise?
One thing is probably sure, though, and that is in an extremely cynical, suspicious and relatively tight-fisted country like ours, government may need to come up with something much more imaginative than a feed-in tariff if it is to get anywhere close to actually achieving its domestic low carbon objectives.
