Renewable Heating Incentive brings in massive reform for the renewables sector

As from 1 February 2010, a 12 week consultation began to iron out the detail for the Renewable Heating Incentive scheme.

The RHI will very effectively reward those homeowners who opt for a renewable heating system such as a ground or air source heat pump, solar thermal, biomass and CHP.  It will be based on an annual fixed fee depending upon the 'deemed' energy generated by the heat source.

So what are the pertinent points?
1. Any installation of a renewable heating system, whether retro-fitted into an existing dwelling or as part of a new-build, will be eligible so long as it was installed after 15 July 2009. The RHI will come into effect from April 2011.
2. A tariff will be paid to the end user annually - estimates are showing that a 3 bed semi could receive up to £1000/annum for 23 years on a ground source heat pump. The larger the system, so the bigger the tariff.  This will dramatically reduce the payback time on an installation to within 5 years in most cases.
3. It is likely, as with electricity feed in tariffs that the tariff will be tax free.
4. On heat pumps, the return on investment is 12% (better than an ISA) and on solar thermal it will be 6%.

The whole point of the RHI is to provide an incentive for the uptake of efficient renewable energy systems in the UK to help us reach our CO2 emissions targets and reduce our consumption of energy. This is good news given today's announcement by Ofgem that the UK should expect energy shortages within the next 5 years! 

And on that note, how about integrating domestic electricity generation into the equation- solar PV can generate electricity to help run low energy lighting and contribute to appliances whilst at the same time earning you money through the feed-in tariff, realising £900/annum for a 1kW domestic system (in addition to saving £140/annum on reduced grid electricity usage). Have both a heat pump and a solar PV system and you could be looking at an annual income of at least £2000/annum!  Who says renewables doesn't pay?!

Boiler scrappage scheme launches on 18 January 2010

A government scheme that gives households in England £400 off the cost of a new boiler or heat pump has been launched.

The boiler scrappage scheme was announced in the pre-Budget report last month.
According to the government it will help households cut their energy bills, reduce CO2 emissions and support thousands of jobs. Up to 125,000 households in England could benefit from the scheme, which is costing the government £50m.


People who own their homes or landlords who rent homes are eligible, but social landlords, housing associations and boiler installers are not. There are about 3.5 million homes in England with the least efficient types of boilers.

How do I do it?
To qualify households need to have a working G-rated boiler. It is likely to be G-rated if it is more than 15 years old and gas fired.
A permanent pilot light is also a good indicator as to whether a gas
boiler is G-rated. If the boiler is oil-fired, then this is likely to be eligible if it is more than 25 years old.
Householders aged under 60 can only apply if the boiler is the main boiler used to heat the home and is in working order. For those aged over 60, the device does not have to work.

Then, you need to provide the Energy Saving Trust (EST) with details of your old boiler and the installer you have chosen to fit your new heating appliance. The EST will also want confirmation the installer has actually visited your home and provided you with a proper quote for the work. Installers need to be Gasesafe (in the case of a straight boiler replacement) or MCS accredited if you replace your old boiler with a heat pump.

Assuming all that is in order, a voucher worth £400 will be issued. This will be refunded once the work has been done and the EST has received both the invoice for the work and the voucher. It is valid for 12 weeks.

The householder pays the bill in full to the installer and then claims the £400 back from the EST.
The £400 rebate should take no more than 25 working days of the paperwork reaching the Trust.

For further information on the scheme contact Pure Solar Ltd.

LED leads the way in new generation lighting

LED lighting is set to change how we light our properties, offices, shops and restaurants due to it being VERY energy efficient. Added to that it's sexy (you can choose any number of hues from the colour spectrum) and has a very long life (over 50,000hrs - that's 6 years of continuous use compared to just 5000 hrs for a halogen bulb).

Replacement LED lamps are now available for GU10 halogen lamps and the equivalent to a 50watt halogen would be a 4watt LED - that less than a tenth of the running cost of a halogen! Added to that it's life span of x10 that of the halogen, you will really see the benefit to your pocket.

We calculate that you will see the payback on an LED lamp, based on it burning 6 hrs/day, in just under 2 years. And for a typical shop or restaurant where the average burn time/day would be closer to 10-12 hrs, the payback is even quicker. Such properties tend to have 50+ lights which we calculate would see an annual saving of at least £400.

Should you want further information and costs for LED lighting, drop us an email at info@purerenewables.co.uk with your query.

Solar PV could earn you money!

From April 2010, new Feed-In tariffs are being proposed that will really begin to make solar PV a cost-effective and very sensible option for domestic householders. Not only will you be paid for excess electricity you generate and sell to the grid (export tariff), you will also receive an amount per kilowatt hour of electricity produced, regardless of whether you use it in the home or sell it to the grid (generation tariff).

This makes the scheme alot more generous and it is hoped that it will significantly increase the uptake of micro-generation in the UK. Currently the Department of Energy & Climate Change is recommending 36.5/kWh is paid to those who retrofit a Solar PV system onto their home which could realise a return of around £1000/annum. In addition to this, you will be able to provide for your own electricity needs, hence reducing your electricity bill further.

Is your home airtight?

The airtight solution to cutting energy costs

Mark Brinkley, author of The Housebuilder's Bible maintains that air-tightness in homes is vital to energy efficiency. But can the UK make a cultural shift to accept the air-tight way of life?

In the past, when home owners wanted to improve the energy efficiency of their dwelling, the solution was to add more insulation, install a condensing boiler or put in double glazing.

By 2006, however, the Building Regulations' requirements for insulation, boilers and windows had caught up with and even surpassed what was previously thought of as high performance, suddenly giving builders and home improvers more work and new standards.

Diminishing returns

Writing in the Last Word column for Homebuilding and Renovating magazine, The Housebuilder's Bible author Mark Brinkley said nowadays, simply adding more and more insulation is not going to achieve a genuinely low-energy house.

This is because insulation is "subject to the law of diminishing returns", so while the first inch saves a "huge amount" of heat, the second and third save less and less. After ten inches, the savings "make very little difference".

Perhaps more importantly, adding insulation will make no difference at all if the heated space is draughty, as all the air will simply leak out.

"You simply can't build a really low-energy house without addressing air-tightness - it's critical," Mr Brinkley wrote.

UK homes

In January, Leeds Metropolitan University's Low Carbon Housing Learning Zone published a study that found levels of air-tightness in residential property varies widely across the UK, with the least airtight dwellings suffering air leakage around ten times the level experienced in the most airtight homes.

Furthermore, the report cited evidence from the Building Research Establishment, which indicated that on average, properties constructed between 1980 and 1994 were actually no more airtight than those built at the start of the 20th century.

In places like Canada and Scandinavia, airtight construction is much more commonplace, as winters are much colder, Mr Brinkley noted.

Indeed, Canada has demonstrated that truly low-energy properties can be built with insulation levels similar to those used in the UK - if they are airtight.

The cultural shift

The problem for UK homes is "more cultural than technological", he said. "Britons want their cat flaps, their draughty letter boxes and the much-desired open fireplace."

If UK builders are going to have to get serious about airtight design then home owners are going to have adapt their lifestyles, Mr Brinkley said.

"Just as your car's fuel consumption depends to a large extent on how you drive, so your home's energy performance depends on how you live in it," he commented.

Unless this cultural change takes place, he concluded, UK builders could work to ever-higher standards of energy efficiency but fuel bills will not fall and carbon emissions will not be reduced "because we don't like closing our windows"

Good news for those who are generating heat from a renewable source!

The government are working towards a scheme whereby a feed-in tariff will be applied to the bills of anyone generating heat from a renewable source such as a heat pump or biomass boiler.

Currently feed-in tariffs are applied to electricity generation where any electricity generated by a wind turbine, hydro-turbine or solar PV that is excess to the customer's needs can be 'sold' back to the grid. Thankfully the government are increasing these tariffs AND they will also be introducing a similar scheme for heat generation.

Of course measuring any 'excess' heat is well-nigh impossible and in any case it can't be easily recycled back into a grid so the kick-back to the customer will likely be in the form of a payment/kW output of energy from the appliance. But this means that from 2011 the attractiveness of a renewable heat generating appliance will become even more acute in terms of very low fuel bills indeed.

It is true to say that in Germany, Scandanavia and other European nations, the single most influential factor in encouraging the uptake of renewables has been the feed-in tariff. The oft-talked about 'payback period' becomes pretty much irrelevant in the face of financial kick-backs into the end-users pocket, especially when the longevity of a heat pump (for example) is factored into the equation.

A typical scenario comparing heat pump to oil boiler could therefore look like this:

Heat pump costs £10000 to buy and install. It costs 2/3 as much to run as an oil boiler - say £2400 rather than £3600. You're saving £1200/annum. If an oil boiler costs £3500 to buy and install, the differential in capital cost is £6500 - divide this by 1200 and the pay-back is just 5.4 years - not bad. However, feed-in tariffs could reduce the £2400 running cost by as much as 50% in which case the payback period becomes just over 2 years. Finally, consider the lifespan of a heat pump is double that (at least) of a boiler where a replacement boiler will be circa £3500, you can quickly see that the payback is virtually eliminated!

Make no mistake - the era of cheap gas and oil is over AND the government are going to increasingly employ a carrot and stick approach, rewarding those on renewables and penalising those remaining on fossil fuelled energy.

Are gas price reductions here to stay?

Over the past 5 weeks we have seen a dramatic reduction in the price of oil. Thankfully the pump prices on our garage forecourts are falling back to levels not seen since early 2008 and gas prices are falling too. But does this mean we can all breathe a sigh of relief and assume that these 'low' prices will remain?

I believe there are two issues at stake here - the first is one of supply and the second is that of responsibility.

1. Supply.
There's no doubt that our oil and gas reserves are running out. Estimates tell us that we have less than 40 years of discovered oil left on this earth whilst gas reserves are fast diminishing too. Even if these estimations are inaccurate, it's certainly becoming more and more difficult to find and excavate fossil fuel reserves - and this will have a long-term upward effect on the price of these fuels. Britain has historically extracted its own gas from the North Sea fields but as these reserves run out we will be forced to import from other places. Just today the BBC reported that Russia, one of the world's main gas suppliers, is indicating the age of cheap gas is over. In essence, Britain's gas and oil prices will likely rise over the long term.

2. Responsibility
Whether you agree with or refute the evidence that global warming is happening at a rate faster than predictions can keep up with, given the diminishing supply of oil and gas and the irrefutable evidence that both are major pollutants of the environment, it stands to (strong) reason that cleaner energy generation will benefit us all (and our children's children). We all have a responsibility towards helping clean up our world through the application of clean, renewable energy solutions. Furthermore, each of us should do their bit. But, the issue won't hit home until the positive effects on our pockets become palpable and this will only happen once the Government incentivise us to employ alternative energies. The carbon emissions targets are stringent and Britain is taking this seriously.

Increasingly over the next few years you will see a carrot and stick approach whereby renewable energy users will be rewarded and fossil fuel users penalised. This will happen through taxation and financial kick-back schemes and through funding incentives whilst fossil fuel users will see higher taxation and supply costs.

Read it here - over the long term gas prices will increase. In the short term they will continue to be volatile. Electricity prices on the other hand will continue to remain relatively stable and as nuclear generation comes on stream prices will fall. However, a very real option when it comes to electricity is to generate your own, thereby insulating you or your community from both gas and electricity price fluctuations. Already, cash-back schemes for self-generation are available and these will only improve.

Useful article: http://news.bbc.co.uk/1/hi/world/europe/7796806.stm