Renewable Energy Grants
There are two significant incentives for customers to invest in renewable energy technology in the UK currently: (i) the UK Government's Feed In Tariffs Programme to support small scale renewable electricity generation, and; (ii) the Renewable Heat Incentive Scheme.
The Renewable Heat Incentive (RHI) Scheme relates to renewable heating installations carried out as of 15th July 2009, and is available across England, Wales and Scotland. Further details on this Scheme will be provided shortly.
UK Government Feed In Tariffs – Wind Turbines and Solar PV Systems
On April 1st 2010, the UK Government launched its Feed In Tariffs (FITs) Programme, which provides support for small scale renewable electricity generation in England, Wales and Scotland.
The FITs programme effectively replaces the Low Carbon Buildings Programme (LCBP) grants, which have since been discontinued.
The following renewable energy generation technologies are eligible for support as part of the scheme:
(i) Wind Turbines;
(ii) Solar Photo Voltaic (PV) Systems;
(iii) Hydro Systems;
(iv) Domestic Scale Combined Heat and Power (2kW or less) – up to 30,000 units (Pilot Scheme);
(v) Anaerobic Digestion.
PROVEN Wind Turbine (United Kingdom)
This programme is the UK Government’s new support mechanism for renewable energy generating technologies, less than 5 MW in size. As part of this scheme, "Generators":
(i) Receive a Fixed Amount for each kW they generate – Generation Tariff – regardless of how that electricity is used;
(ii) Receive an Additional Fixed Payment per kW exported to the grid – Export Tariff;
(iii) Benefit from Savings on electricity costs when the electricity they produce is used within their own property – Electricity Cost Savings.
Installations carried out as of 15th July 2009, are eligible to benefit from the full Tariff Payment Structure. Payments will be made from the Electricity Supplier to the “Generator” for every kilowatt hour (kW) of electricity generated and a guaranteed minimum payment for every kW exported to the wider electricity market.
In order to be eligible for the Feed In Tariffs programme, customers (“Generators”) must ensure that the Product they are installing is certified by the Microgeneration Certification Scheme (MCS), and that the Installer is also MCS certified.
UK Government Feed In Tariffs - Proposed Tariff Levels
The proposed Generation Tariffs are presented in the tables below. Payments are index-linked and guaranteed for 20 or 25 years, depending on the technology. Some of the payments vary slightly over that period.
Existing microgenerators (installed prior to 15th July 2009) will be paid 9 pence / kWh, assuming that certain conditions have been met with regard to the installation. The Export Tariff is proposed to be set at 3 pence / kWh exported back to the grid, as standard for all installations.
| Tariff Levels - Wind Turbines | |||
| Technology | Size / Scale |
Tariff Year 1 (Pence / kWh) |
Tariff Length |
| Wind Turbine | < 1.5 kW | 34.5 | 20 Yrs |
| Wind Turbine | > 1.5 - 15 kW | 26.7 | 20 Yrs |
| Wind Turbine | > 15 - 100 kW | 24.1 | 20 Yrs |
| Wind Turbine | > 100 - 500 kW | 18.8 | 20 Yrs |
| Wind Turbine | > 500 kW - 1.5 MW | 9.4 | 20 Yrs |
| Wind Turbine | > 1.5 MW - 5 MW | 4.5 | 20 Yrs |
| Tariff Levels - Solar PV Systems | |||
| Technology | Scale |
Tariff Year 1 (Pence / kWh) |
Tariff Length |
|
Solar PV - Retrofit (Existing Property) |
< 4 kW | 41.3 | 25 Yrs |
| Solar PV - New Build | < 4 kW | 36.1 | 25 Yrs |
|
Solar PV - Retrofit (Existing Property) |
> 4 - 10 kW | 36.1 | 25 Yrs |
Apart from the Feed In Tariffs associated with Wind Turbines and Solar PV Systems, the following Tariffs are available for Hydro and Micro CHP systems:
(i) Hydro Systems (< 15 kW) – 19.9 pence / kWh;
(ii) Micro CHP Pilot (< 2 kW) – 10.0 pence / kWh.
Renewable Heat Incentive Scheme (RHI)
In its Renewable Energy Strategy (RES), published on 15 July 2009, the UK Government set out its path towards achieving its target of 15% of overall energy consumption in the UK to come from renewable sources, by 2020.
Clean Energy Cash-Back
“Clean Energy Cash-Back” (otherwise known as the Renewable Heat Incentive) encourages individuals, communities and others who are not professionals in the energy business, to play their part in bringing forward renewable energy, by providing a financial incentive to switch from using fossil fuels for electricity and heat, to renewable technologies and sources. The Energy Act 2008 provides the statutory basis for a Renewable Heat Incentive scheme to be introduced across England, Wales and Scotland.
The Renewable Heat Incentive (RHI) will be formally launched in April 2011, and will remain open to new projects until at least 2020. However, eligible installations completed after 15 July 2009, but before the start of the RHI, will also be allowed to benefit from the scheme, as if they had been installed on the date of its introduction (April 2011).
Renewable Heat Incentive - Eligible Renewable Technologies
The following renewable technologies are eligible for the Renewable Heat Incentive:
1/ Heat Pumps;
(i) Air Source Heat Pumps
(ii) Ground Source Heat Pumps
(iii) Water Source Heat Pumps
2/ Solar Thermal Panels (Flat Plate and Evacuated Tubes);
3/ Biomass Boilers such as Wood Pellet, Wood Chip and Multi-Fuel;
4/ Renewable Combined Heat and Power (CHP);
5/ Technologies such as the use of biogas, biomethane and bioliquids.
A series of Tables with the Proposed Tariffs for Small, Medium and Large Installations is presented below:
|
Renerable Heat Incentive Tariffs - Small Installations |
||||
|
Technology |
Scale |
Proposed Tariff |
Deemed or Metered |
Tariff Length |
|
Solid Biomass |
Up to 45 kW |
9 |
Deemed |
15 Yrs |
|
Ground Source Heat Pumps |
Up to 45 kW |
7 |
Deemed |
23 Yrs |
|
Air Source Heat Pumps |
Up to 45 kW |
7.5 |
Deemed |
18 Yrs |
|
Solar Thermal |
Up to 20 kW |
18 |
Deemed |
20 Yrs |
|
Renerable Heat Incentive Tariffs - Medium Installations |
||||
|
Technology |
Scale |
Proposed Tariff |
Deemed or Metered |
Tariff Length |
|
Solid Biomass |
45 - 500 kW |
6.5 |
Deemed |
15 Yrs |
|
|
|
2 (Fuel Tariff) |
Optional: for metered kWh above deemed number of kWh |
15 Yrs |
|
Ground Source Heat Pumps |
45 - 350 kW |
5.5 |
Deemed |
20 Yrs |
|
Air Source Heat Pumps |
45 - 350 kW |
2 |
Deemed |
20 Yrs |
|
Solar Thermal |
20 - 100 kW |
17 |
Deemed |
20 Yrs |
|
Renerable Heat Incentive Tariffs - Large Installations |
||||
|
Technology |
Scale |
Proposed Tariff |
Deemed or Metered |
Tariff Length |
|
Solid Biomass |
500 kW and above |
1.6 - 2.5 |
Metered |
15 Yrs |
|
Ground Source Heat Pumps |
350 kW and above |
1.5 |
Metered |
20 Yrs |
Payments made as part of the Renewable Heat Incentive Scheme will be claimed by, and paid to, the Owner of the equipment. For small and medium sized installations, both the Product (equipment) and Installer will need to be certified under the Microgeneration Certification Scheme (MCS), in order to ensure quality assurance and consumer protection.
Payments will be paid over a number of years (please refer to table below); annually for installations below 45 kW and quarterly for those above this level.
Renewable Heat Incentive - Tariff Levels
The Tariff levels of the RHI Scheme have been calculated to bridge the financial gap between the cost of conventional (fossil) and renewable heating systems of all scales. There is additional compensation for certain technologies for an element of the non-financial cost (e.g. the inconvenience of digging up a garden to install a Ground Source Heat Pump).
Tariff levels have been proposed to provide a rate of return of 12% on the additional capital cost of many of the renewable systems, with a lower rate of return of 6% given to Solar Thermal.
Renewable Heat Incentive - Payments
Payments will be calculated based on the annual amount of heat output, expressed in kilowatt hours (kWh). For Small and Medium Installations, the amount of heat generated by the equipment will be estimated (or “Deemed”). This will allow the beneficiary of the Incentive to receive a set amount based on the deemed output, while discouraging any excess production or energy waste.
For Large installations and process-heating, the heat output will be metered, and the total annual support calculated from the actual energy generated, multiplied by the tariff level.
The Renewable Heat Incentive Scheme will be administered by Ofgem, including making Incentive payments to recipients and taking responsibility for auditing and enforcing the Scheme. The Department of Energy and Climate Change (DECC) will work with Ofgem to devise a simple process for accrediting smaller installations, to ensure that standards are met and payments can be made.
Further Updates
The details with regard to how the RHI Scheme will be financed will be clarified prior to the launch of the Scheme in April 2011. It is expected that financing measures will include the following:
(i) Levy on fossil fuel (oil / gas) supply companies;
(ii) Levy on fossil fuel (oil / gas) customers (domestic and/or commercial).
Further updates with regard to the Renewable Heat Incentive will be published on this page, as and when the information becomes available.
Don't forget to check back in regularly with www.enerfina.com!
