Posts Tagged ‘feed-in tarrifs’

The Green Deal: who would you prefer to deliver it?

Wednesday, July 14th, 2010

For mass take-up of energy saving measures we need effective financing schemes, so we welcome the glimpses of detail on the Green Deal that Greg Barker gave us at the end of June. However, it’s not enough to get a clear view of how the scheme will work.

How will it be delivered?

Barker said: “Two things are vital. Community involvement is very important, but the other exciting thing about the green deal is that it is not just reliant on the big six energy companies, which have mixed reputations, but brings in some of our most trusted high street retailers and brands, such as Marks and Spencer and Tesco, which have strong degrees of consumer trust.”

Yes, they’ve got consumer trust. But for selling food, or clothes, or DIY products. Not for their expertise on installing domestic energy efficiency. This isn’t a pile it high, sell it cheap product. It’s specific to the needs of each house, and customers need expert advice on the best solution for their circumstances.

Past grants schemes for insulation have tended to be very one dimensional, with little choice of material. It’s mineral wool or nothing under most of the schemes. I hope that this scheme, which has a much more ambitious reach in numbers covered, will also offer householders choice as to products and measures – as long as they meet the goals of reducing carbon emissions and reducing the total energy bill. This will need the involvement of local and specialist companies, as well as the big national ones.

Not only will this offer choice, but it will help boost local businesses to provide the green jobs that are so much mentioned, and give consumers some peace of mind. Smaller, local companies have to deliver a good service, their reputation depends on it, and word soon gets out if they don’t. The nationals are much more likely to sub-contract the work, and put pressure on the margins of the people working for them, losing the level of accountability for customers.

Who would you rather get your insulation and other energy efficiency measures from? The big boys? Smaller, local installers? The council? A N Other? Please let us know by commenting at the bottom of this blog, and voting in the poll on the YouGen home page.

The pay-as-you-save pilot schemes set up under the last government won’t report until April 2011, but I hope that the coalition will learn from what has happened so far. The innovative charity Bioregional, which has been running a pilot with Sutton Council and B&Q emphasises the importance of bringing it back to community and partnership levels.

The figure of £6,500 is a disappointment. I know that it’s the one the Conservatives were touting in the run up to the election, but hoped that the LibDems would negotiate it up nearer the £10,000 that they were proposing.

It’s also a serious disappointment that microgeneration will not be covered under this scheme. There are plenty of households that have insulated, and would like to take things further, but need help with the up-front costs. Yes there is a feed-in tariff, but that doesn’t help with the capital cost. It looks as though the government relying on the market to provide – but is that the best way to go, and will it provide in a way that will encourage action on a large scale?

First published on the YouGen blog. For more information on energy efficiency and renewable energy, visit the YouGen website.

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Is a heat pump suitable for my home? 3 key checks

Tuesday, May 4th, 2010

Heat pumps are one of the most talked about renewable technologies – on television, in newspapers and magazines. The way they are portrayed they seem to be the answer to all our problems and will suit all properties. But is this true?

Heat pumps (ground, air or water) suit only certain applications and it is important to cut through the marketing spiel and realise this. These units can have large capital costs and can cost you more to run than the system you are replacing if installed in the wrong place.

Three of the key issues to check out before you install are as follows:-

1) Well insulated buildings

As heat pumps are a low temperature device, it is important that buildings that they are installed in are well insulated. Un-insulated buildings require high flow temperatures (the maximum from a heat pump is approx 55 degrees C). Heating to this temperature reduces the efficiency of the heat pump, as the compressor has to work harder to produce the higher temperatures. Add to this, the fact that in a poorly insulated building the heat emitting device, radiators or underfloor, may not be able to provide heat into the building at the low temperatures, so not only are the running costs high, but you also feel cold!

Insulating the building well also reduce the size of the heat pump needed, and the initial capital costs and, in the case of ground source, the amount of ground required.

2) Heating distribution systems

Most existing houses have radiators installed as their heat emitting device. A lot is made of the fact that heat pumps should only be used with underfloor heating. This is not strictly true. However, as radiators require the water to be heated to a high temperature, a heat pump will run up to 25% less efficiently with radiators. In addition, you may need to install larger radiators, to keep warm enough.

3) The fuel you are replacing

Many companies indicate savings can be achieved of up to 50% of your current fuel bills. However what they don’t tell you is that the amount you save depends on the fuel you are replacing and the installation, as we saw above. Different fuels have different costs associated with them. Direct electricity is the most expensive and gas the cheapest. While heat pumps use electricity to drive them, because of their high efficiencies the cost per kWh used can be as much as quartered, if you are currently heating with electricity.

If you have mains gas, the running cost of a well installed heat pump is similar, but as soon as you add radiators or a poorly insulated building into the equation, it pays to stay on gas. However this is likely to change next year if the Renewable Heat Incentive is introduced.

Heat pumps do not suit all applications. You can see that a rambling 17th Century listed building on radiators is not an ideal candidate, neither is an un-insulated building on radiators and the gas main. Do not install a heat pump in a poorly insulated building. However, where the application is correct heat pumps can significantly reduce running costs and carbon emissions making them a worthwhile investment and with the renewable heat incentive the growth of the heat pump market is about to explode.

Written by John Barker-Brown, special projects manager at British heat pump manufacturer Kensa Engineering. First published on www.yougen.co.uk.

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Feed-in tariff: your questions answered

Monday, February 8th, 2010

The introduction of the feed-in tariff (known as Clean Energy Cashback scheme) opens a new and exciting era for microgeneration. Here we answer some of the most common questions on the new scheme. If you’ve got any more, please add a comment below and we’ll do our best to answer. The information below refers to domestic installations of less than 50kW. This blog post supplements our main information page on feed-in tariffs which gives all the rates for each technology.

What return on my investment should I expect?
The scheme has been devised to give a 5 to 8% return on investment for “well-sited installations”. Of course, you will only get this good a return if your system performs well, so it is important to measure the wind speed, or solar potential, before going ahead with an installation.

Is it better to export the electricity I produce, or to use it at home?
The aim of the Clean Energy Cashback is to incentivise people to use the electricity they produce at home where possible. The amount you save by not buying electricity from your energy company is significantly more than the sum you get for exporting it. It makes sense to do things that use electricity while your system is generating. So you might do the vacuuming or run the washing machine during the day if you’ve got solar panels, or when the wind is blowing if you’ve got a turbine. The government hopes that by generating your own electricity you will develop a better understanding of energy and become a more efficient electricity user.

Do I have to make my house more energy efficient to qualify for the scheme?
There are no mandatory requirements to do so, but it makes sense to increase the energy efficiency first, as it is generally a more cost effective way of reducing energy bills and carbon pollution. The expectation is that by installing a microgeneration system you will get a much better understanding of how you use electricity, and that will lead to a reduction in your total use. The system is structured to encourage that too – the less you use, the more you can export and earn income on.

What happens if I move house?
With the average family moving house every 7 years or so, and the life of the feed-in tariff at 20 years (10 for CHP, 25 for solar panels), this will happen to a lot of people. The government expects standard property ownership rights to apply to the generating equipment. This means that when a house is sold, the generating equipment and the FiT payment are sold too, and the system administrator must be told of the sale. They expect that the market will decide how much a microgeneration installation will increase the price of a house.

Can I take my solar panels or wind turbine with me, and still claim the Clean Energy Cashback?
No. The scheme is only available on installation of new systems, by an an MCS accredited installer. If you took your equipment with you, reinstalling it would count as a second hand installation, and not be eligible for the Cashback.

Will there be loans available to help with the upfront costs of installing microgeneration equipment?
Although the government is currently piloting five Pay as You Save schemes, it has no plans to introduce “a mechanism for up-front capitalisation of FiT revenues”. It says: “We hope the market will provide the necessary loans or other finance packages to drive the uptake of small-scale technologies”. However, it is possible for owners of generating systems to assign their rights to feed-in tariff payments to others. This is expected to pave the way for a range of ways of financing microgeneration in social housing and new build, and may form the basis of a new type of loans for homeowners.

Am I eligible for the feed-in tariff if I install my own system?
No. To claim FiTs you must use an MCS accredited installer and install MCS accredited products.

Will I have to pay tax on the income I get from the Clean Energy Cashback?
Income for domestic properties generating electricity mainly for their own use will not be taxable income for the purposes of income tax.

Are the payments inflation proof?
Both the generation and the export tariffs will rise annually in line with the retail price index.

How long will I receive the tariff payments for?
25 years if you have photovoltaic (solar) panels; 20 years for hydro, wind and anaerobic digestion; and 10 years for micro-CHP. If you installed your system before 15 July 2009 you will receive payments until 2027.

I’ve heard that the rates “degress” over time. What does this mean?
The theory is that as the market for microgeneration grows the prices of the equipment and installation are expected to go down. As this happens there will be less need for such a large financial incentive and so the rates of the Clean Energy Cashback will go down. Degression is where tariffs for new installations are set at a lower level each year, than they were the previous year. The rate you receive at installation then stays the same for the whole life of the tariff (with annual adjustments in line with the retail price index). Degression will not start until April 2012.

What happens if I add to the capacity of my renewable energy installation?
If you have two different technologies on the same site (ie wind turbines and solar panels) they will be classed as different installations. Multiple installations of the same technology at the same site will be classed as a single installation. Similarly, if you add to an existing installation of the same technology within 12 months it will be treated as an increase in capacity of the same installation.
If you add to a system more than a year after the first part was registered in the Central FiTs Register, it will count as a new station.

I installed my system before the Feed-in Tariff proposals were announced. Am I eligible?
If your system was installed before 15 July 2009, and is accredited under the Renewable Obligation (RO), then you will be automatically transferred onto the Clean Energy Cashback in April 2010 (albeit at the lower 9p generation rate). If you are not accredited under the RO, then you must get accreditation before 31 March 2010 to be eligible. You will continue to receive this support until 2027.

Can I claim the Clean Energy Cashback if I install a refurbished or second-hand system?
No. The reasoning behind this is that the scheme is intended to encourage new entrants into the market, and has been designed on the basis of cost assumptions for new equipment. However, the government aims to keep this under review, and will “consider whether or not there are merits to allowing renovated or refurbished technologies to receive FiTs support in the future, bearing in mind the different cost and the fact that equipment may have received other financial support through its life”.

What is the MCS?
The Microgeneration Certification Scheme is an independent, industry-led, certification scheme for both installers and products. It is accredited by the United Kingdom Accreditation Service (UKAS) and is adminstered by Gemserv.

Can I opt out of the export tariff and sell my electricity on the market?
If you feel up to dealing with the risks of the electricity market you can choose to out of the export tariff. If it doesn’t work for you, you can opt back in – but can only make the change once a year.

Why is the case different for micro-CHP?
This is a new technology, which has the potential in the long run to take over from condensing gas boilers. It is being included in the Clean Energy Cashback scheme as a pilot to provide initial support for the new industry. It is limited to the first 30,000 units (with an electrical capacity of 2kW or less), and will be reviewed after the first 12,000 installations. Recipients of the Clean Energy Cashback for micro-CHP will receive it for 10 years.

Will off-grid generators qualify for feed-in tariffs?
Yes, you will receive the generation tariff. To do so, you will have to declare that the electricity generated has been used, and must comply with the scheme requirements in relation to metering. You can approach any of the mandatory FiT suppliers (ie the big electricity companies) and they will be obliged to provide your Clean Energy Cashback payments. Voluntary FiT suppliers (ie the smaller energy companies) may also agree to provide FiT payments to off-grid generators.
Eligibility for off-grid remote communities will be considered at future reviews of the scheme.

Which suppliers can I export my electricity to?
All suppliers with a minimum of 50,000 customers will be obliged to accept microgeneration customers. They are described as mandatory suppliers. Smaller specialist suppliers can.

First published on YouGen

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