The UK government is committed to making a significant reduction to carbon emissions over forthcoming years and to achieve this they need to encourage widespread adoption of renewable energy technologies by industry, commerce and the residential sector.
In April 2010 a series of incentives were introduced which, coupled with the significant savings that accrue from offsetting fossil fuels with free or cost-effective green energy, provide a very attractive rate of return on your initial investment and a reduced payback time.
The savings on your bills and income from the incentives will depend on your property, energy use and the traditional fuel you are replacing. Solarsense will always provide a detailed projection of the savings you can make specific to your own property as part of your installation.
Put simply, the Feed-in Tariff (FiT) is payment made to you annually for generating electricity from a range of microgeneration technologies, including Solar PV.
Under the FiT you are paid for every unit of electricity you generate, irrespective of whether you go on to use the energy in your home. You are also paid an additional sum for energy exported to the National Grid.
This merits repeating: under the FiT you are paid for every unit of energy your system generates, and all that electricity is free for you to use.
Once you have entered into the FiT scheme your payments will increase annually in line with inflation and are guaranteed for 20 years. However, to encourage uptake the rate offered to new entrants to the scheme will reduce over time, so the sooner you sign-up the higher your returns will be.
As mentioned above, all the electricity you generate is free for you to use and every unit you use is a unit you don’t have to buy from a traditional electricity suplier. In addition, for domestic installations, you will be paid for exporting half the electricity you generate, even if you actually use more than 50%. (Speak to us about ways to maximise the use of your green electricity.)
What all this means is that an investment in a technology such as solar PV will provide you with a regular payment equivalent to a rate of return typically between 8% and 12%, tax free and index linked. Where else can you find a guaranteed rate of return this attractive?
Due to be implemented in spring 2014, the Renewable Heat Incentive (RHI) is a payment for offsetting fossil fuels by using renewable heat sources.
Solar thermal (for hot water), ground- and air-source heat pumps and pellet boilers all qualify for the RHI which means that you will receive annually an agreed sum of money for every unit of heat energy you produce from these sources. The RHI is paid for seven years.
A solar thermal system will provide 90% of your domestic hot water from May through September and give you considerable savings the rest of the year. Typically using a heat pump or pellet boiler will save you 40% over an equivalent oil-fired or LPG heating system. Add to this the generous payments promised by the RHI and the fact that you will no longer be dependent on expensive fossil fuels, and these alternatives become very attractive indeed.
The amounts payable under the RHI have yet to be ratified by the DECC but the intention is to give you an affordable seven year pay-back on your investment, with considerable fuel savings thereafter.
Once it is introduced, the domestic RHI will be payable on all relevant equipment commissioned post July 2009. In the meantime selected technologies are eligible for the Renewable Heat Premium Payment.
The Renewable Heat Premium Payment is a one-off grant designed to help towards meeting the costs of installing renewable technologies in your home, until the Renewable Heat Incentive (RHI) is introduced for domestic customers.
The RHPP offers one-off grants to householders across England, Scotland and Wales to help with the cost of installing renewable heating technologies. The amount received as part of the Renewable Heat Premium Payment scheme depends on which technology you are applying for:
Solar Thermal - £600
Air-to-water Heat Pump - £1300
Ground-source Heat Pump - £2300
Biomass Boiler - £2000
There are several criteria to be met before you will be eligible for the RHPP. Full details are avilable on the Energy Saving Trust website but Solarsense will always talk you through the options as part of our surveying process.