Research conducted by Npower business solutions shows that UK-based businesses are largely in favour of the proposed new energy legislation regarding renewables obligations (RO) and feed in tariffs (FiT,) and they feel that it is likely the changes will have a positive effect on their business when they go ahead.
The changes in legislation was announced in late 2015 as part of the government’s spending review. In the review, the government announced its intention to scrap the compensation scheme for RO/FiT and to introduce an exemption programme in its place. 51% of those surveyed stated that they were in favour of the exemption scheme and plans to backdate compensation as they felt it would enable their businesses to remain competitive.
However, more than half of the manufacturers interviewed said that they were not aware of the government’s plans regarding Renewables Obligations and Feed in Tariffs, and the majority of retailers had not heard of the government’s proposals either.
Review and Consultation
A review into the proposals is scheduled to get under way later this year, and according to the research more than half of those surveyed said they would be interested in taking part during the consultation phase because of the impact the proposals could have on their business.
Commenting on the plans, head of Npower Business Solutions, David Reed said:
“The proposed exemption would represent good news for the businesses and sectors which are eligible. Making regulatory processes more transparent and more straightforward would reduce the burden on businesses and would provide them with greater clarity about their finances.
“A majority of retailers and manufacturers we spoke to were not aware of the upcoming consultation. That’s why we’re working with the Government to host a round table event, to explain these upcoming changes to businesses and discuss the proposed benefits.”
Renewables obligation and feed in tariffs explained
The Renewables Obligation scheme is a measure that was introduced to ensure that electricity suppliers buy a percentage of their power from renewable energy suppliers, however, these charges have been steadily increasing due to a number of factors, including the surge in the number of renewable energy companies.
The Feed in Tariff was an attempt to get UK-based businesses and homes to generate greener forms of energy themselves such as wind and hydro power; the suppliers get compensated for each kWh of energy that is generated. However, as with the Renewables Obligation scheme, the cost of the tariffs are continuing to increase because of the growing number of low carbon energy firms and a greater amount of green energy being generated.