Power balance

When the Energy Secretary, Chris Huhne, made his announcement on Monday 9 August 2010 to lift the ban on local authorities selling surplus electricity generated through microgeneration back to the National Grid, a new opportunity was created. The change in policy finally allowed councils to reduce their carbon emissions and benefit financially from the emerging Feed-in Tariff (FiT) strategy.

The potential of solar power is jaw-dropping, with enough sunlight falling on the earth every minute to meet the world’s energy demands for an entire year.

Recent figures released by the Department for Energy and Climate Change highlighted that local authorities in England alone were responsible for 8.3m tonnes of carbon dioxide per year – that’s 1.6 percent of the UK total.

However, in order for local authorities, to ‘buy into’ the practice of energy efficiency the Government realised there had to be incentives, hence the long-overdue lifting of the 34 year-old ban.

By generating their own power through the installation of micro-generation technologies such as solar photovoltaic (PV) panels, local authorities have be able to save money on energy bills and make money from selling it to the grid.

When you consider their property assets alone, such as libraries, offices, leisure centres and homes, the ongoing potential is huge. Initial estimates suggest that councils could generate up to £100m a year; that’s money which can be channelled back into cut-ridden front line services and to offset other fixed expenditures.

However, since the announcement there has been a key element missing from the Government’s plans. Due to recent cuts, many local authorities can still not afford the upfront cash payment that is required to purchase the relevant ‘green’ technology.

Despite this, there are some new financing options out there – many of which are private sector partnerships such as the ‘rent your roof’ scheme. These offer individuals and local authorities the chance to have micro-generation equipment, such as Solar PV, installed for free, overcoming the problem of raising the initial capital cost and the user also gets to save money by producing their own power for consumption. However, while these schemes do have a place in the market, and for some the only option, local authorities could find themselves missing out on great returns by signing over their roofs to someone else.

What the Government needs to do now is to enable individuals, businesses and local authorities to make the most of the Feed in Tariff and push the implementation of the Green Investment Bank. This is needed to offer local authorities, as well as individuals, the opportunity to invest in low carbon micro generation by providing them with low interest loans. We need to accept that decarbonising the energy market requires up front costs and Chris Huhne must recognise that the Government needs to provide support to local authorities as well as individuals.

The time to act is now while the support mechanisms are in place. A great milestone has been achieved in allowing local authorities to sell green electricity to the National Grid, finally ending the 34 year-old ban. This new opportunity allows them to play a greater role in supporting the green economy, and should not be missed.

Crucially, as the bones are still being picked from the latest Spending Review, we must emphasise the negative impact that has been felt by local authorities and one of the sectors which could underpin economic recovery is ‘green’ technology. We must encourage the implementation of the Green Investment Bank to support future delivery of the scheme and galvanize the continued and long-term usage of green technology.