Wind turbines and the Feed-in Tariff
The UK has witnessed a surge of interest in renewable energy, with technologies and products being developed so that the potential of wind, solar, wave and biomass can be exploited to produce cleaner, sustainable sources of power.
The UK Government has encouraged and supported the expansion of new forms of power generation with generous financial incentives. Where onshore wind turbines are concerned, a Feed-in Tariff (FiT) has provided owners of small to medium wind turbines – up to 500kW – with a guaranteed income for every kilowatt of power they generate, fixed for a 20-year period from the date the wind turbine becomes operative. The FiT figure is also index-linked to the annual rate of inflation.
This prompted a healthy expansion in the number of wind turbines, but a sharp degression in the FiT rate effective from the start of 2016 has diminished the attractiveness of the sector for new investment.