With Government incentives and enhanced captial tax allowances there has never been a better time to invest in renewables. The information below gives a snap shot of your options with links for more detail. To discuss the implications for your individual project please do contact us.
Renewable Heat Incentive (RHI)
The RHI is a UK Government funded payment to encourage investment in specific renewable heat generating technologies. Ofgem administer the Scheme, and payments are linked to the Consumer Price Index and vary according to the technology, heat generated, size of the system and tariff rate. There is a Non Domestic and Domestic Scheme, and Glendevon Energy have customers across Scotland that are delighted with their returns from both these schemes.
Biomass boilers, ground source heat pumps and air source heat pumps are all eligible, amonst others. As are retro fitted systems, new builds and properties on and off the gas grid. Highlights of the schemes, with tariff examples are given below.
DECC review the tariffs and take up quarterly. When the budget is exceeded it may trigger a tariff digression. To view the Ofgem information on tariffs, and to view the tariff tables click here. To view DECC's factsheet on tariff reductions (digression) click here.
For biomass systems, owners need to use an approved fuel. Either you need to register your own fuel supply, or your supplier needs to confirm that they are approved. To register click here
The following information is Glendevon Energy's interpretation of information from the Department for Business, Energy and Industrial Strategy (BEIS), Ofgem and the Energy Savings Trust. For your own interpretation and up to date information see http://www.gov.uk/. Any contractual relationship for the RHI will be between the owner and scheme administrator. To confirm your property's eligibility we strongly suggest you contact Ofgem: by emailing RHI.Enquiry@ofgem.gov.uk or telephone 0845 200 2122.
The scheme is open to owner-occupiers, private landlords, Registered Providers of Social Housing, third party owners of heating systems and self-builders. It is not be open to new build properties other than self-build.
The financial support is paid quarterly, to the owner of the heating system, for seven years.
Typically payments are made based on a 'deemed useage' rate, as established in the property's Energy Performance Certificate (EPC).
The scheme supports air source heat pumps (Only Air to Water ASHP), biomass systems, ground source heat pumps (GSHP) and solar thermal technologies. The support rates vary depending on the technology installed.
The scheme is compatible with the Home Energy Scotland Renewables Loan Scheme. This enables homeowners to take out an interest free loan for up to £10,000, for up to 75% of the total cost of the systems. Solar, biomass and heat pump systems can all be eligible, with differing repayment timescales and funds available for different technologies. Applications will be approved on a first come first served basis, and projects must not start until written confirmation of the loan is received. Contact Home Energy Scotland for further information on 0808 808 2282. To check for the most up to date information click here.
In order to apply for the Domestic RHI you need an Energy Performance Certificate (EPC). To find an assessor click here
For Ofgem's introduction to the Domestic RHI click here. For Ofgem's Essential Guide for Applicants click here. For Ofgem's frequently asked questions click here. For information on the BEIS Consultation, The Renewable Heat Incentive: A reformed and refocused scheme, which closed on 27th April 2016, click here.
Domestic Tariffs from 1st January 2017
- Biomass boilers: 4.21 pence per kWh (based upon the deemed usage in the EPC).
- Air source heat pumps: 7.51 pence per kWh (based upon the EPC and system efficiency)
- Ground source heat pumps: 19.33 pence per kWh (based upon the EPC and system efficiency)
- Total payments would be based on (7 years) x (tariff) x (deemed kW useage per year)
- For heat pumps, options open to reward higher performing equipment
- If any new tariff changes are to be made due to degression, the next announcement by DECC would be expected by 1 March 2016.
Non-domestic applications include commercial, public sector and not-for-profit organisations. This includes bed and breakfasts and multiple dwellings sharing the same heat source.
Payments based on actual heat usage, system size and tariff. Tariffs can see a significant return on investment. Installations must be heat metered with RHI compatible meters. Systems up to 45kW only must be MCS registered.
Compatible with Home Energy Scotland (Energy Savings Trust Scoland) small business loans: 5% interest rate if also collecting RHI, from £1,000 to £100,000, repayable over 8 years. For detailed information click here. Or call Home Energy Scotland on 0808 808 2282 and ask to speak to a business advisor.
Non-Domestic Tariffs from 1 January 2017
Ground Source Heat pumps
Tier 1: 8.95p per kWh of heat pump size for the first 1,314 hours per annum
Tier 2: 2.67p per kWh for every kWh produced after that
Air Source Heat pumps
2.57p per kWh of heat pump size for the first 1,314 hours per annum
200 kWth and above & less than 1MWth
Tier 1: 2.95p per kWh of boiler size for the first 1,314 hours per annum
Tier 2: 0.78p per kWh for every kWh produced after that
Tier 1: 5.24p per kWh of boiler size for the first 1,314 hours per annum
Tier 2: 2.27p per kWh for every kWh produced after that
Any contractual relationship for the Non-Domestic RHI will be between the owner and scheme administrator. To confirm your property's eligibility we strongly suggest you contact Ofgem by emailing RHI.Enquiry@ofgem.gov.uk or calling 0300 003 2289.
Non Domestic RHI Calculator
The Glendevon RHI Calculator allows you to calculate the potential returns for your project in terms of RHI payments and fuel savings. Below is a calculator for you to download and fill in, as well as sample calculations for you to view. The sample calculations are for a 45kW and 198kW boilers; to show a range of returns.
This calculator is Glendevon Energy's interpretation of the information from the Renewable Heat Incentive Consultation document, and should only be used as guidance and should not be considered a guarantee. Figures exclude any interest payments on loans to fund capital investment.
Showing payback in 7 years, with capital investment of £55,000 and current oil bills of £3,900 per year.
Showing payback in 10 years, with capital investment of £35,000 and current oil bills of £3,900 per year.
Showing payback in 6 years, with capital investment of £95,000 and current oil bills of £7,804 per year.
Showing payback in 7 years, with capital investment of £96,000 and current oil bills of £12,880 per year.
Showing payback in 4 years, with capital investment of £250,000 and current oil bills of £43,320 per year.
Energy Saving Trust Scotland (EST) Loans
Resource Efficient Scotland SME loans are available to Small and Medium sized businesses, private landlords and not for profit organisations. The loans are up to £100,000 and when combined with FiTs or RHI have a fixed interest rate of 5%. For further information click here.
Home Energy Scotland operate a Renewables Loan Scheme which offers homeowner's an interest free loan of up to £10,000 towards the cost of installing a renewable energy system. For further information click here.
Enhanced Capital Allowances
Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief. The ECA scheme provides businesses with 100% first year tax relief on their qualifying capital expenditure. The Energy Technology List (ETL) specifies the energy saving technologies that are included in the ECA scheme. For further information please click here.