Government proposals to allow homeowners to cash in on small-scale energy generation by selling it on to the National Grid have been slammed by engineers for offering misleading figures.
From April homeowners who install low-carbon micro-generation such as wind turbines and solar panels will be paid for the electricity they generate, even if they use it themselves.
Homeowners will get a further payment for any electricity they feed into the grid, and will also benefit from reduced bills as they need to buy less electricity.
Feed-in tariffs will set the level of payment depending on the technology. The Department for Energy and Climate Change (DECC) claimed a typical 2.5kW photovoltaic installation could pay a homeowner up to £900 and save £140 a year on electricity bills
But the Royal Academy of Engineering said the return was likely to be far below headline figures.
The Academy’s visiting professor in building engineering physics at the University of Bath Doug King said studies had shown that small-scale renewables schemes often generate far less energy than expected.
He said that under the new feed-in tariff an average wind turbine on a home would pay a homeowner just £69 per year on top of the electricity bill savings of £26.
“Feed-in tariffs will provide a great stimulus to the renewable energy sector. But I am concerned that the headline figures being quoted for financial returns could encourage people to make unwise investments,” he said.
“Feed-in tariffs will pay according to the amount of renewable electricity generated and studies have shown that small scale renewable systems often generate far less in practice than originally anticipated,” he said.
A 2009 study of small scale, domestic wind turbines by the Energy Savings Trust found no urban or suburban installation that generated more than 200 units of electricity per year.
“There is no question that a well designed renewable energy system in the right location is a benefit, but for many of us living in towns and cities the conditions are just not ideal,” said King. “In fact you will often be better off investing in energy savings at home or in a large scale renewable energy scheme through a co-operative or commercial venture.”
The Renewable Energy Association (REA) welcomed the news, but said the full effect will not be felt until 2011, when 2011 the scheme will be expanded to include ground source heat pumps, biomass boilers and air source heat pumps.
Under the proposed tariffs the installation of a ground source heat pump in an average semi-detached house with adequate insulation levels could be rewarded with £1,000 a year and lead to savings of £200 per year if used instead of heating oil.
“The UK may be languishing behind the rest of Europe on renewable heat, but the proposals launched today are an important world first,” said REA policy director Gaynor Hartnell.
“Renewable heat is the sleeping giant of renewable energy in the UK with a major contribution to make. The sooner we invest and build capacity in the renewable heat industry, the better value and energy security this will bring the UK - and the more jobs will be created.”
Friends of the Earth said the measures did not offer a big enough incentive. It said the rate of return on investment should have been set at 10%, instead of the 5-8% the government expects homeowners to make.
Green homes campaigner Dave Timms said the government had been “far too timid”.
“Installing renewable technologies will now be a good investment for many homes - but farmers, businesses, communities and others will get little or no extra incentive to invest in clean electricity,” he said.