The government's announcement on feed-in tariffs is to be welcomed but some details need to be looked at carefully
The best part of this news is that it shows there's no back tracking - we are gearing up for a renewables revolution and the government is ready to move forward.
I welcome the move to index link the feed-in tariff (FIT) payments. This will provide investor certainty of the value of the systems over the course of their lifetime.
Many in the industry have been calling for this throughout the consultation. It is good to see that the voice of industry has been listened to.
I also welcome the government's consultation on the Renewable Heat Incentive (RHI) and hope that whichever party wins the next election that the RHI will still be introduced in 2011 as planned.
I hope to see a greater emphasis on biomass included in the RHI as it has been removed from the FIT and it is important that it is not ignored and that biomass CHP in particular gets further government support to move into the mainstream.
Of course everyone has commented on the relatively modest return on investment of 5-8% which is clearly low for any investor. But interestingly, there's no mention of the potential uplift on future property asset values. This could be substantially more than 8%.
I welcome degression for PV not being applied until 2012, but it is a shame that the degression rate will be increased by 0.5% from 2015 as it is not yet clear whether the industry can achieve such cost reductions in such a short amount of time.
I'm also pleased that support for wind energy will be targeted at community scale projects (>500KW). This should ensure that the technology is at a scale that actually works, and where the real generation and carbon reduction opportunities exist.
The main concern I can see is that the turbine manufacturing industry seems to be focusing on producing larger units
The export tariff has been reduced (from 5p/kWh to 3p/kWh), but even so, this scale of project has seen its support level increase and the community level band will help the economics of this scale of project.
Almost all the visitors we have coming to Beaufort Court are very positive about this, especially when they see the RES wind turbine and several other technologies working together as a system, and we are advising several clients to go down this route to achieve major FIT benefits from this year.
The main concern I can see is that the turbine manufacturing industry seems to be focusing on producing larger units (2MW plus) and therefore there are relatively few suppliers that can serve this smaller scale sub 1MW market.
Raising finance, procuring and getting O&M contracts in place to ensure proper maintenance will be an issue those in the industry still need to resolve.
To do this properly and reliably you need a well established business like RES with proven delivery track record and access to finance.
My hope is that the UK market will respond to the anticipated demand that these initiatives will stimulate. There is a real opportunity for our technology, engineering and manufacturing businesses.
I also hope that the government will move the necessary legislation swiftly through parliament so that industry can begin to make the investments with absolute certainty.
Matthew Brundle is executive director of Inbuilt and head of its renewables consultancy