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Plug Pulled on Green Energy Grants Warning That Home Power Market Could Now Collapse

Posted on: Monday, 13 February 2006, 09:01 CST

By VICKY COLLINS ENVIRONMENT CORRESPONDENT

CASH grants to help householders who want to harness wind or solar power are to be axed.

Allan Wilson, the deputy enterprise minister, says he wants to scrap the current scheme, which pays for up to one-third of the cost of installing "green energy" systems such as wind turbines.

More than 600 grants have already been awarded, with money also available for solar panels, biomass heating systems - which use wood from sustainable plantations - and even small-scale hydro dams.

Known as microrenewables, many of these products are still being developed so they can be made cheaper to install and run.

Environmental groups and suppliers have warned the market could collapse if government financial support was taken away at such an early stage.

The Department of Trade and Industry has already announced similar schemes in England will finish at the end of the year.

In an interview with The Herald, Mr Wilson said he believed domestic renewables had a significant role to play and added that he would like to see them become as common as television aerials.

However, he said the current scheme - administered by the Scottish Community and Household Renewables Initiative (SCHRI) - was only helping those rich enough to pay a significant sum to install a device.

MrWilson said it was failing the "fuel poor", who could most benefit from cutting their bills through the use of a smallscale wind turbine, solar panels, or biomass heater.

He said: "I think there is an argument for subsidy where you have a community benefit but I do not think it works where you reduce the cost to somebody who is already fairly well-off.

"That does not increase environmental awareness, or help the fuel poor. You have to stimulate the market.

"There may be an argument for a scheme which targets the fuel poor, but SCHRI will not continue in its present form."

Officials with Friends of the Earth Scotland were angered by MrWilson's comments.

Duncan McLaren, chief executive, said: "This could kill off the microrenewables industry, just as it was beginning to make a break through."

Proven Energy, a small Scottish company which produces home turbines, also predicted scrapping subsidies would destroy the microrenewables market.

Gordon Proven, managing director, said: "It is unbelievable. This scheme was helping to build the market and to bring prices down. If you cut it now the whole market will collapse.

"We had hired new employees on the basis that the grants would continue. We had even started looking to invest in machinery so we could massproduce these turbines and so bring the costs down. This plan is ludicrous."

MrWilson instead wants to concentrate on encouraging owners of microrenewables to become involved in the Renewable Obligation Certificates (Rocs) system.

This is currently aimed at major energy generators and suppliers and allows householders to be given money back for every unit of "green" electricity generated for the national grid. The scheme is credited with being responsible for the rapid development of onshore windfarms.

Proven Energy, based in Stewarton, East Ayrshire, said it had already helped some customers gain access to Rocs, with the extra earnings estimated at around GBP600 a year.

Mr Wilson said: "There are problems with it technically in terms of the ability to connect these small devices to the grid and how we incentivise that process is important.

"Making it easier for microrenewables to access Rocs is important.

"If we can do that, then I think we would see microrenewables take off in the way onshore wind has taken off, " he added.

"They should be as ubiquitous as satellite dishes or television aerials."

The sustainable home

1. Micro wind turbines The wind turns aerodynamic blades that turn a rotor that generates electricity. Can be free-standing or fitted to a strong wall.

Installation costs: between GBP3000 and GBP18,000 depending on the size.

2. Solar Photovoltaic panels on the roof, which convert heat from the sun into electricity or use it to heat water. These panels do not need direct sunlight, only daylight.

Installation costs: between GBP2000 and GBP9000.

4. Small-scale hydro Works in the same way as a major hydro scheme, using a dam or other device to convert the kinetic energy in moving water into electricity. Can be expensive to install and obviously needs a stream or river nearby but then provides a reliable and constant source of power.

Installation costs:

between GBP20,000 to GBP25,000.

3. Ground Source Heat Pumps Works on the same principle as the heat pump in a fridge.

A length of pipe is buried several metres beneath the ground (where the temperature is constantly hotter than above) and takes the heat from the earth to pump it back up into the house to heat water or provide electricity.

Installation costs: between GBP6400 and GBP9600.

Source: Herald, The; Glasgow (UK)

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