A major sticking point between residents of Scotland and the Scottish Government over renewable energy has been the feed-in tariff. This is the tariffs that are charged on household energy consumption by households, rather than companies, when they have applied for an energy grant. Providing evidence of all charges received during the past year is required in order to prove eligibility for the scheme. While the initial applications of the feed-in tariff scheme were met with great enthusiasm by many local residents soon began to voice concerns about the fairness of the scheme. As a result, the Scottish Parliament has been conducting its own investigations into the scheme, which it plans to put before Scottish residents later this year.
How do Feed-in-Tariffs Work?
The Feed-in Tariff was designed to encourage home owners to generate their own electricity using solar or wind power, and then sell excess electricity back to the national grid. Although it was intended to be a pilot scheme, in early 2021 the Government introduced a further five-year phase of the scheme, known as the Increased Percentage of Electricity produced by Renewable Energies. Although this brought forward the closure of the feed-in tariff for a further three years, it caused a number of significant changes to the electricity markets across Europe. In addition, a number of countries, including Germany and Netherlands, have now brought forward their feed-in tariffs for a period of five years. Other countries, such as Ireland and Sweden, have also implemented a one-year trial period for certain types of renewable technologies.
There are two major problems with the feed-in tariff system. First, while it encourages renewable power, it does not encourage the installation of new renewable energy infrastructure. Second, the tariffs can act as an obstruction to investment in new, cheaper renewable technologies, as investors are more likely to invest in existing, regulated energy supplies, than risky ventures in developing nations.
Scotland’s feed-in tariff system works by allowing home owners to generate excess electricity from renewable energy sources, such as solar power, and trade this surplus back to the national grid. However, not all residents are able to participate in this scheme, as it only applies to properties in Scotland that are located on a home owner’s land. Also, if you live outside of Scotland, you will still be required to generate at least part of your electricity through traditional means.
The Scottish Government estimates that up to 10% of all power users could make a living by selling surplus electricity generated by home owners. This would create a huge demand for rural areas, but there is an even greater opportunity in urban areas. According to a report prepared by the National Grid, there is a potential of generating enough electricity for every one thousand homes in England, Wales and Northern Ireland by the end of the next decade.
In an effort to make the most of this potential, the Scottish Government has issued a series of Feed-in Tariffs. These permits will allow residents of Scotland to generate excess electricity for a set period, either all year round or for a part of the year. For those unable to generate electricity on their property for any reason, they will be able to sell their surplus energy back to the Scottish electricity supplier, known as Scottish Power. The amount of surplus electricity generated by residents of Scotland on their property has increased dramatically over the last decade. However, as well as generating income from the sale of surplus energy, the Scottish Government hopes that by participating in Feed-in Tariffs, residents will contribute towards a clean and green environment.