Feed in tariffs and renewable heat incentives
Since the UK election in May 2015 the ‘Green Deal’ that provided loans for measures to reduce home energy use or generate heat or electricity was closed and the ‘Feed-In Tariffs’ (FITs) scheme, that pays a return for investing in electricity generation, was significantly altered. The Renewable Heat Incentive (RHI) scheme is still in place and RHI and FIT both require an EPC as part of the process.
Energy Performance Certificate (EPC)
EPCs are required for all homes bought, sold or rented in the UK and they contain assessments of the walls, roof, floors, windows, lighting and heating and hot water. The ratings range from A (Very Efficient) to G (Inefficient), with indicative costs and savings for suggested measures to make the property warmer and less expensive to run. Properties need an EPC of ‘D’ prior to installing renewable electricity to obtain the ‘higher’ FIT rate and a current EPC confirming that loft and wall insulation is satisfactory for renewable heat. See http://bit.ly/15G5XWZ for more details and the Energy and Comfort pages here for an example of an EPC.
Feed In Tariff (FIT) payments for generating electricity
Installing your own system to generate electricity may be thought of as a way of helping the UK reduce its carbon emissions, as a way to reduce dependence on the Grid, or even in terms of a financial investment. The current Feed In Tariff (FIT) scheme attracts a quarterly FIT payment for 20 yrs and an ‘export tariff’ for half the electricity you generate for the life of the installation – both paid by your electricity company. See http://bit.ly/1R16zfy for current rates. The rates rise by the Retail Price Index (RPI) every year and are tax free. Additionally you will save money on lower electricity bills. Solar PV may be worthwhile financially if you have capital available (i.e you don’t need to borrow), you intend to stay in your home for at least 10 years, if your roof is south-facing and if you can use much of the electricity yourself. Ways of matching your use with the sun shining include:
- running appliances – such as washing machines, dishwashers
- heating water (to reduce gas heating)
- charging batteries – such as phones, but particularly electric car batteries
The likely returns for the outlay depend on the cost and efficiency of the panels, the suitability of the site, the FIT rate at the time that the installation is accepted and the percentage of the electricity you can use. You should also consider how soon you need to recoup the capital before receiving any return. Every reputable installer should be able to advise on methods of maximising your usage and expected returns for a particular installation, but checking the figures with a financial advisor would be prudent.
Renewable Heat Incentive payments for heating rooms and water
The ‘Renewable Heat Incentive’ (RHI) for ‘domestic’ premises was launched in March 2014 and pays a return for investing in hot water systems and other renewable heat sources. See http://bit.ly/1IW9R3R for the Ofgem guide and http://bit.ly/1QytBYx for current rates, which are paid for 7 years, will increase in line with RPI and are tax free. Factors, such as whether an inefficient heating system is currently used, will affect the returns, and, again, it is advisable to get advice on the financial implications.
Note that ‘district heating’ systems, such as communal heating in apartment blocks are under the ‘non-domestic’ RHI scheme, which is already in place but is significantly different. See bit.ly/1gEzYI8
See the ‘Solar Roofs and More’ sheet here for further information about Solar PV and bit.ly/1obZEFd for more details of planning permission for Solar in local conservation areas.