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Renewables need economic case, says report

Householders need to be given a compelling economic reason to install renewables in large numbers, according to a recently published report examining the growth potential of microgeneration technologies.

The report, completed by Element Energy, was commissioned by a consortium whose members include the Department for Business, Enterprise and Regulatory Reform, the Micropower Council, Ceres Power and suppliers British Gas and E.on.

Key findings suggest there is potential to massively increase the take-up of microgeneration technologies, but this would need additional Government investment, better co-ordination of support schemes and a clear direction on energy policy.

An excerpt from the report reads: “In today’s environment, no microgenerator offers a superior economic case compared to the incumbent option (except in niche locations). Technology cost reductions will be required alongside policy development.”

Although the number of renewable installations has only increased by 18,000 to 100,000 in the past four years, the report predicted existing policies would help increase this to a million by 2020. Researchers said this could be increased to 2-3 million or further if extra measures were introduced.

These measures include a long-term incentive scheme, a zero-carbon homes definition which restricts the use of off site electricity, additional efforts to help technologies such as micro-CHP reach full scale commercial production and consumer campaigns promoting renewables.

The report said the issue of energy supply was crucial: “It is important this issue is tackled before substantial microgeneration support schemes are put in place. It would be possible to ‘lock in’ UK consumers to the wrong microgeneration technology if overall energy policy is not thought through in an integrated and long-term manner.”

The Conservatives immediately seized on the report as supporting its stance on microgeneration. Shadow Secretary of State for Business, Enterprise and Regulatory Reform Alan Duncan said: “Instead of holding yet another review, the Government should immediately amend the energy bill to allow for feed-in tariffs and make sure they can generate a little more than just their usual hot air.”