encouraging small-scale renewable energy

Eskom doesn't seem at all interested in encouraging individual homeowners to generate their own energy, despite a shortfall in electricity supply that has lasted for several years and will continue to hamper economic growth in South Africa. So just in case there is any doubt about the viability of creating a distributed generation system that the power utility doesn't even have to create or manage, Ontario is demonstrating that it is possible. The Canadian province last month passed the Ontario Green Energy and Green Economy Act with a guaranteed feed-in tariff (FIT).

Under that scheme, utilities are obligated to buy electricity from renewable power producers at artificially high prices set by the government. Wind, solar and biomass projects can be hugely expensive, and sometimes downright uneconomical. But FITs let investors get a return, and they create a guaranteed market for renewable electricity, which encourages development. In Ontario’s case, the rates are guaranteed for up to 20 years.

Comments

[Frank Spencer]

Yes, but are we prepared to pick up the extra cost of a small scale PV FIT that would work out to over R3,50 / kWh needing to be paid??

[Rory]

Frank, I look at it two ways. First, all new technologies cost too much in the beginning, and that's one reason to develop a bigger market - to get the technology to a mature state. Second, the benefits are spread wider than just to the people putting panels on their roofs or turbines in their yards, which is why it is worth subsidising in the early stages.