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Domestic micro-generation: Economic, regulatory and policy issues for the UK

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  • Watson, Jim
  • Sauter, Raphael
  • Bahaj, Bakr
  • James, Patrick
  • Myers, Luke
  • Wing, Robert

Abstract

Micro-generation in individual homes has been the subject of increasing policy and industry attention in recent years. Whilst it has been estimated that micro-generation could meet 30-40% of UK electricity demand by 2050, deployment to date has been slow. In its Micro-generation Strategy the UK government has started to outline how deployment could be increased. Various technical, economic, behavioural and institutional changes are needed to establish a UK market for micro-generation. This article discusses how different deployment models for domestic micro-generation might attract investments in these technologies. It considers not only investments by individual households but also by energy companies. Starting from an economic analysis of payback times for three different technologies (micro-CHP, micro-wind and solar PV) it identifies policy and regulatory recommendations. It argues for technology-specific support policies in the short term. It also suggests that a 'level playing field' for micro-generation technologies as a result of fiscal and market reforms could considerably increase the attractiveness of micro-generation technologies.

Suggested Citation

  • Watson, Jim & Sauter, Raphael & Bahaj, Bakr & James, Patrick & Myers, Luke & Wing, Robert, 2008. "Domestic micro-generation: Economic, regulatory and policy issues for the UK," Energy Policy, Elsevier, vol. 36(8), pages 3085-3096, August.
    • Handle: RePEc:eee:enepol:v:36:y:2008:i:8:p:3085-3096
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    Cited by:

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    2. Finney, Karen N. & Sharifi, Vida N. & Swithenbank, Jim, 2012. "The negative impacts of the global economic downturn on funding decentralised energy in the UK," Energy Policy, Elsevier, vol. 51(C), pages 290-300.
    3. Geoffrey P. Hammond & Adam A. Titley, 2022. "Small-Scale Combined Heat and Power Systems: The Prospects for a Distributed Micro-Generator in the ‘Net-Zero’ Transition within the UK," Energies, MDPI, vol. 15(16), pages 1-32, August.
    4. Joe Pitt & Colin Nolden, 2020. "Post-Subsidy Solar PV Business Models to Tackle Fuel Poverty in Multi-Occupancy Social Housing," Energies, MDPI, vol. 13(18), pages 1-15, September.
    5. Juntunen, Jouni K. & Hyysalo, Sampsa, 2015. "Renewable micro-generation of heat and electricity—Review on common and missing socio-technical configurations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 857-870.
    6. Saunders, R.W. & Gross, R.J.K. & Wade, J., 2012. "Can premium tariffs for micro-generation and small scale renewable heat help the fuel poor, and if so, how? Case studies of innovative finance for community energy schemes in the UK," Energy Policy, Elsevier, vol. 42(C), pages 78-88.
    7. Walek, Tomasz T., 2023. "New model of cost allocation for micro-cogeneration systems applied in multi-family buildings — with standard and new-type multi-source energy meters," Energy, Elsevier, vol. 262(PB).
    8. Balcombe, Paul & Rigby, Dan & Azapagic, Adisa, 2013. "Motivations and barriers associated with adopting microgeneration energy technologies in the UK," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 655-666.
    9. Burford, Neil & Onyango, Vincent & Wright, Frances, 2019. "LZCGT impact on GHG reductions in Scotland's new domestic buildings," Energy Policy, Elsevier, vol. 129(C), pages 34-52.
    10. Allan, Grant & Eromenko, Igor & Gilmartin, Michelle & Kockar, Ivana & McGregor, Peter, 2015. "The economics of distributed energy generation: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 543-556.
    11. Sunderland, Keith M. & Narayana, Mahinsasa & Putrus, Ghanim & Conlon, Michael F. & McDonald, Steve, 2016. "The cost of energy associated with micro wind generation: International case studies of rural and urban installations," Energy, Elsevier, vol. 109(C), pages 818-829.
    12. Hammond, Geoffrey P. & Harajli, Hassan A. & Jones, Craig I. & Winnett, Adrian B., 2012. "Whole systems appraisal of a UK Building Integrated Photovoltaic (BIPV) system: Energy, environmental, and economic evaluations," Energy Policy, Elsevier, vol. 40(C), pages 219-230.
    13. Spyridon Karytsas & Ioannis Vardopoulos & Eleni Theodoropoulou, 2019. "Factors Affecting Sustainable Market Acceptance of Residential Microgeneration Technologies. A Two Time Period Comparative Analysis," Energies, MDPI, vol. 12(17), pages 1-20, August.
    14. Chen, Jian & Chen, Liu & Xu, Hongtao & Yang, Hongxing & Ye, Changwen & Liu, Di, 2016. "Performance improvement of a vertical axis wind turbine by comprehensive assessment of an airfoil family," Energy, Elsevier, vol. 114(C), pages 318-331.
    15. Giulio Allesina & Simone Pedrazzi, 2021. "Barriers to Success: A Technical Review on the Limits and Possible Future Roles of Small Scale Gasifiers," Energies, MDPI, vol. 14(20), pages 1-23, October.
    16. Ceglia, F. & Marrasso, E. & Pallotta, G. & Roselli, C. & Sasso, M., 2023. "Assessing the influence of time-dependent power grid efficiency indicators on primary energy savings and economic incentives for high-efficiency cogeneration," Energy, Elsevier, vol. 278(PB).
    17. Leenheer, Jorna & de Nooij, Michiel & Sheikh, Omer, 2011. "Own power: Motives of having electricity without the energy company," Energy Policy, Elsevier, vol. 39(9), pages 5621-5629, September.
    18. Athena Piterou & Anne‐Marie Coles, 2021. "A review of business models for decentralised renewable energy projects," Business Strategy and the Environment, Wiley Blackwell, vol. 30(3), pages 1468-1480, March.
    19. Victoria Kihlström & Jörgen Elbe, 2021. "Constructing Markets for Solar Energy—A Review of Literature about Market Barriers and Government Responses," Sustainability, MDPI, vol. 13(6), pages 1-20, March.
    20. Boon, Frank Pieter & Dieperink, Carel, 2014. "Local civil society based renewable energy organisations in the Netherlands: Exploring the factors that stimulate their emergence and development," Energy Policy, Elsevier, vol. 69(C), pages 297-307.
    21. Kopanos, Georgios M. & Georgiadis, Michael C. & Pistikopoulos, Efstratios N., 2013. "Energy production planning of a network of micro combined heat and power generators," Applied Energy, Elsevier, vol. 102(C), pages 1522-1534.
    22. Baskaran, Ramesh & Managi, Shunsuke & Bendig, Mirko, 2013. "A public perspective on the adoption of microgeneration technologies in New Zealand: A multivariate probit approach," Energy Policy, Elsevier, vol. 58(C), pages 177-188.
    23. James, P.A.B. & Sissons, M.F. & Bradford, J. & Myers, L.E. & Bahaj, A.S. & Anwar, A. & Green, S., 2010. "Implications of the UK field trial of building mounted horizontal axis micro-wind turbines," Energy Policy, Elsevier, vol. 38(10), pages 6130-6144, October.

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