Microgeneration for the Masses

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Published: 23 October 2006

Microgeneration for the Masses

Energy companies, high street banks and consumer finance companies have been challenged by Climate Change and Environment Minister Ian Pearson to develop low-cost finance schemes to help boost take-up of household microgeneration.

Such a scheme would complement measures outlined in the Government's Microgeneration Strategy, published by the Department of Trade and Industry, aimed at stimulating widespread take-up of these technologies.

Mr Pearson said it should be as easy to get finance for a wind turbine as a sofa.

"The Government's recent microgeneration strategy, published by the DTI, highlighted the high up-front cost as a barrier to greater take-up of household wind turbines and solar panels.

Everywhere you look these days, there are adverts for sofas, electric goods and kitchens - all offering interest free credit or easy long-term loans. Yet, there are no such offers for microgeneration.

I passionately believe that it should be as easy to get finance for a wind turbine as it is for a sofa.

This could be through credit or loans, or it could be an energy service contract with the cost rolled up with a customer's energy bills. Green mortgages or long-term leasing are other options that could be taken up.

My challenge today to the high street banks and consumer finance companies, energy suppliers and others is to work with the microgeneration companies to come up with new, innovative offerings."

Speaking at the UK Business Council for Sustainable Energy Conference in London, Mr Pearson said:

"As well as being a very visible, iconic measure, microgeneration can play a key role both to reduce carbon emissions and as a tool to engage people and help they become energy-aware consumers."

He added that microgeneration was just one example of the three-pronged approach the Government was taking to reducing carbon emissions, which includes:

· Taking the carbon out of the energy supply system as we move towards zero and low-carbon energy supply and distributed generation

· Using energy more efficiently through more efficient, better designed buildings, vehicles and appliances

· Reducing the demand for energy services - by changing behaviour & avoiding waste

Mr Pearson highlighted the Government's commitment in the Energy Review to improve energy standards for products and buildings and its desire to remove the worst products from the market.

Commenting on the progress of the Energy Efficiency Commitment, which has proved to be one of the most successful instruments in reducing carbon emissions, Mr Pearson said he was delighted to hear of Scottish and Southern Energy's announcement that they will be committing to insulate an additional 50,000 homes by the end of 2007:

"Ensuring a smooth transition for the next phase of the Energy Efficiency Commitment is absolutely vital if the energy efficiency industry is to be ready to deliver even higher levels of activity in 2008.

I am delighted to hear that SSE will be committing to tackle an additional 50,000 homes, with two thirds of those in priority homes, by the end of 2007.

This is exactly the sort of contribution we are looking for from the industry.”

Microgeneration is defined as the small-scale production of heat and/or electricity from a low carbon source and the suite of technologies includes:

· solar (PV to provide electricity and thermal to provide hot water)

· micro-wind (including the new rooftop mounted turbines)

· micro-hydro

· heat pumps

· biomass

· micro combined heat and power

· small-scale fuel cells

The Government provided an additional £50m announced in the Budget 06, giving the Low Carbon Buildings Programme £80m in total over a three year period.

A study commissioned by the DTI, from the Energy Saving Trust, suggested that by 2050, microgeneration could provide 30-40% of the UK's electricity needs and help to reduce household carbon emissions by 15% per annum.

In 2004, there were approximately 82,000 microgeneration installations in the UK.

Under the Energy Efficiency Commitment (EEC), electricity and gas suppliers are required to meet targets for the promotion of improvements in energy efficiency in the household sector:

· The EEC is claimed to have been highly successful

· Under EEC1 (2002-5), suppliers met their targets, delivering 0.4MtC (million tonnes of carbon)

· EEC1 stimulated about £600m investment in energy efficiency and delivered net benefits to householders in excess of £3 billion. The current EEC2 (2005-8) requires around double the level of activity of EEC1

· In the UK Climate Change Programme, the Government set out ambitious levels for the third phase of the EEC (2008-2011) - to deliver about 0.9 - 1.2MtC by 2010 - a 50% to 100% increase on the scale of the current EEC.

The Government is considering a range of issues to support the development of the next phase of the EEC and the specific target. An initial consultation was launched this summer, with a view to a statutory consultation in Spring 2007.

Further Information:

Energy Review

Sustainable energy: Energy Efficiency Commitment

Scottish and Southern Energy

Micropower Conference speech (March 2006)

Microgeneration Strategy (scroll down)

Micropower Council

2006 Climate Change programme

Low Carbon Buildings Programme

Carbon Trust

DTI: Government renewable energy policy

UK Business Council for Sustainable Energy