Renewables rewards

If Britain wants to kickstart a green energy revolution, as politicians, pressure groups and the public say they do, the government will have to consider setting up a German-style "feed-in tariff" system which rewards people and firms that invest in generating renewable electricity either to use themselves or "export" to the national grid.

This is done by guaranteeing micro-generators a premium price for any electricity generated. At the moment, the best anyone can hope for in return for investing thousands of pounds on a photovoltaic, combined heat and power or wind "micro" system is 9p per KW from renewable group Good Energy.

Other electricity companies buy green power for less, or offer special packages that may be targeted at a particular source. The consensus is that micro-generation pays itself back at about 4% a year over the 25-year life of most installations - a very poor incentive.

The Conservatives say they want to see supermarkets and businesses becoming generators and suppliers of electricity. They plan to set up a fund to cover the cost of paying micro-generators a premium for energy fed into the grid. This would be financed by abolishing existing grant schemes

The government has said it will look afresh at ways it can be made more attractive to invest in micro-generation schemes, "including a feed-in tariff". Meanwhile, it has been embarrassed by being found to have cut the existing renewable energy grant system. This has led to grave doubts about whether it is committed to renewables at all.