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.
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.
posted by Chris Whitelock at
16:57
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