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This page gives some initial details on the Feed inTariff, Renewable Heat Premium Payment and the Renewable Heat Incentive (Domestic and Non-domestic)

All political parties when in Government, have helped develop the present range of incentives to invest in renewable energy systems. These substantially improve the financial return on any investments that an owner makes and is part of a comprehensive new Energy Strategy to help home owners, landlords and tenants as well as industrial and commercial properties.

However the government has often linked a number of these different energy initiatives together. This can make it quite complicated, if not bewildering, for people who have not followed its development. We at Cosmos Energy would expect to handle all these complexities for our customers but can help your general understanding of it all with this introduction:

• The main microgeneration schemes which give incentive payments are the FIT (for renewable electricity generation), the RHPP and the RHI (for renewable heat installations). Even if you have already had a system installed, you may be eligible for payments.
• In order to be eligible for incentives, owners are usually required to have carried out certain sensible energy saving measures. This is to meet their aim of improving the energy efficiency of the nation’s buildings and reduce overall energy demand. Cosmos Energy will help owners with such requirements
• The Government introduced the Energy Companies Obligation (ECO) at the beginning of 2013. ECO is an energy efficiency programme that places legal obligations on the larger energy suppliers to deliver energy efficiency measures to domestic energy users. It is intended provide additional support with a particular focus on vulnerable consumer groups and hard-to-treat homes.
• The Green Deal is a scheme introduced in January 2013 by the government to help finance energy saving measures (including renewable microgeneration). The principle is that one pays back part or all of the cost of the improvements over time through your electricity bill. However any repayment that is made through the electricity bill must be less than the savings that are being made ie the overall quarterly bill should not increase. It is however quite a complicated scheme and interest rates being offered are quite high so it is not often used.

A summary of the incentive schemes is as follows. Please note that this website is only meant to be an introduction to the main elements of the schemes. Please contact us for more detailed information.

Feed in Tariff (commonly known as FiT)

This scheme was introduced in 2010 and pays owners of eligible microgeneration systems for generating electricity (ie microgeneration means less that 45kW peak capacity. The Renewable Obligation (RO) covers larger generators). FiT regulations also requires electricity suppliers to purchase surplus electricity that the owner of the system do not want to use themselves.

All eligible installations need to use MCS approved equipment and be installed and registered by MCS accredited installers to detailed and increasingly strict standards.

Microgeneration Certification Scheme  

The benefits to an owner are firstly that they are paid for every unit (kWh) of electricity generated, secondly that they can use the electricity if they want to and thirdly they can sell it into the electricity grid.

Until smart meters are installed (not due to begin on smaller, domestic systems until 2015) the electricity companies cannot measure how much is exported to the grid, so the government has stipulated that electricity companies should assume that 50% of everything generated is exported and owners are paid accordingly.

A FiT agreement once signed will ensure that the agreed payments are made for 20 years. Very importantly the initial tariffs once set will be increased by the rate of inflation every April. This increase is determined by the change in the Retail Price Index and will become an increasingly important element of the FiT payments made to an owner.

Cosmos Energy assists customers at all stages of making any application for FiT and can provide more information on request.

The rates applicable to most of our customers is summarised below for convenience:>

Notes:

The rates for PV are for the higher rate tariff which most people are eligible for.

The rates for new PV installations may be revised downwards every quarter - starting after 31/12/2013.

The rates for new non-PV are liable for revision from 31st March 2014.

The earliest date at which an installation can become eligible for a tariff is set by the date at which the installation is commissioned, after being registered on the MCS database. This then fixes the rate for the installation which is then increased annually by the rate of increase in the Retail Price Index.

The scheme is administered by OFGEM. Further details and the current tariffs can be found on the following links.

OFGEM - Feed-in-Tariff Scheme  

Energy Saving Trust - Feed-in-Tariff Scheme  

Alternatively contact us at Cosmos Energy for more information.

Renewable Heat Premium Payment (commonly called RHPP)

Originally the Government of the day proposed to introduce the Renewable Heat Incentive (RHI) in 2010 but due to the pioneering nature of the scheme and the change of Government this has been delayed several times. They introduced the RHPP as a stop-gap, one-off payment to ensure they were continuing to incentivise property owners to invest in renewable heat equipment. The scheme will finish when the RHI is introduced in April 2014 (subject to parliamentary approval in early 2014).

Most people receiving an RHPP payment should also be eligible for the RHI but if they are successful then a proportion of any RHPP payments will be deducted from RHI quarterly payments. They therefore will not, in the end, get both incentives.

The payments to owners for different technologies are currently as follows:

If you have recently removed a mains gas heating system or currently heat your home with mains gas, you are only eligible to apply for solar thermal.

Although not essential it is advisable to apply for a voucher as soon as you have decided to invest in a renewable heat scheme. The funds made available by the Government are limited and although we believe that there is sufficient money in the scheme it doesn’t hurt to get a voucher that will ensure that funds are allocated to your installation. The voucher will expire on 31st March 2014.

The scheme is administered by the Energy Saving Trust: Energy Saving Trust - Renewable Heat Premium Payment Phase 2  

You can also contact them on 0300 123 1234. Alternatively contact us at Cosmos Energy for more information.

Applications for the RHPP can be made online via their website. Cosmos Energy assists customers with their application.

Renewable Heat Incentive (commonly called the RHI)

The RHI pays participants of the scheme that generate and use renewable energy to heat their buildings. It is the first scheme in the world to give long term financial support to renewable heat and it is modelled on many of the features of the FiT (which only supports renewable electricity generation).

As with FiT, any installation under 45kW capacity, in order to be eligible for the tariff needs to use equipment which been approved by MCS as being built and capable of operating to a minimum technical standard. The installation must also have been carried out by an MCS registered business to detailed minimum standards. Installations above 45kW capacity need to be specially checked to ensure the equipment, system design and metering comply with the RHI requirements.

There are two RHI schemes, one for industrial and commercial properties or installations covering multiple homes, and the other for individual domestic homes.

The non domestic RHI

This scheme was launched in November 2011. The tariffs are paid quarterly over the expected lifetime of the installation (20 years). The current tariffs which are relevant to most of our customers are as follows:

Notes:

Tier 1 is the rate that is applicable for the first 1314hrs of operation in a year. Tier 2 is for the remaining hours in a year.

Some key elements of the scheme:

• Applicants in order to prove their eligibility for this scheme (as opposed to the Domestic RHI) would normally demonstrate this by the fact that they pay business rates.

 

• Farms do not normally pay business rates but can also be eligible and will need to provide evidence that they meet the requirements of multiple dwellings and/or a commercial business. For example holiday lets can often be eligible.

 

• All heat has to be metered and payments are made based on the element of renewable heat used in the heating.

 

• There are quite detailed application requirements to be met in terms of the equipment efficiency and the installation design which can make the application quite lengthy if not properly carried out by someone who is used to the requirements.

 

• Applications are made online. Each application is reviewed by the scheme administrator (OFGEM) who undertake to complete their review of an application within 6 weeks. It has been stated that the system is being streamlined but there is no doubt that applicants’ lack of experience on the procedures and standards can often be a drawback.

The scheme is being implemented and administered by OFGEM.

Full details can be found here: OFGEM - Renewable Heat Incentive  

OFGEM can also be contacted on 0845 200 2122. Alternatively contact us at Cosmos Energy for more information.

The Domestic RHI

The development of the scheme has been many years in the making and most of the important details of the scheme have now been announced after extensive consultation processes. The rates for the different technologies which will be paid quarterly for 7 years are as follows:

Notes:

All installations must be certified under the Microgeneration Certification Scheme and meet required standards for each technology, including limits on harmful emissions for biomass systems.

The tariff for Solar Thermal will be at least 19.2p, and possibly up to 21.7p, depending on the outcome of the non-domestic tariff review consultation. The announcement on the final tariff will be made in Autumn 2013.

The tariff rates for an installation, once awarded to an application after commissioning will then be increased annually by the rate of inflation by reference to the RPI.

The energy useage will normally be calculated after a property energy assessment, rather than measured. However, the government is keen to encourage metering and to get more performance information. They will therefore pay an additional £230 per year for 7 years to owners who purchase and fit an approved Metering and Monitoring package.

The payments are calculated to compensate owners for the additional installation and running costs of installing a renewable energy system in place of a conventional heating system over the expected 20 year lifetime of the installation.

Some examples of what the RHI would pay out:
For a typical 3 or 4 bedroom domestic home requiring 15,000kWh per year the owner of a renewable energy system might expect to receive from the RHI

£773 pa (totalling £3,865 over 7 years) for an Air Source Heat Pump (if designed to have a SPF of 3.4)

£2,132 pa (totalling £14,924 over 7 years) for a Ground Source Heat pump (if designed with an SPF of 4.1)

£1,830 pa (totalling £12,810 over 7 years) for a Biomass boiler These examples do not include any benefits due to inflation indexing of the payments

Some key points:

• Payments have been designed to be paid out over only a 7 year period compared to the non-domestic scheme which pays out over 20 years. This gives domestic owners an earlier payment of an otherwise comparable amount to incentivise them to make the initial investment.
• The renewable energy used by an installation is by reference to the expected useage of renewable heat. This means it is not normally metered and payments are calculated by reference to the heat requirement produced from an Energy survey as shown on an Energy Performance Certificate (EPC).
• Second homes or homes with more than one type of heating system will need to meter the amount of renewable energy used.
• New build properties developed commercially will not be eligible for the RHI as it is felt that the tightening up of Building Regulations and other planning requirements will be sufficient to encourage them
• ‘Self Build’ new homes (ie people who have built or commissioned their own homes) will be eligible for the RHI.
• The person receiving the payment must be the owner of the system who need not be the occupant.

More independent information can be found at Energy Saving Trust - Renewable Heat Incentive  

The legislation finally fixing all the details of the scheme is to be put before Parliament for final approval early in 2014 such that it will be launched in April 2014. A detailed statement giving the rates and how the scheme will operate were published in July 2103 and can be found at

Department of Energy and Climate Change - Domestic Renewable Heat Incentive  

Alternatively contact us at Cosmos Energy for more information.

Why not give us a call to see how you can benefit?