• Feed In Tariff

  • Renewable Heat Incentive

Beginning in April 2010, this is the government’s current initiative to encourage the adoption of renewable technologies for the generation of electricity, rather than continue with traditional methods using fossil fuels. The idea is that those people who install these technologies (e.g. Solar Photovoltaic Panels, Wind turbines) will be rewarded financially for their initial investment on the equipment.

For every kilowatt hour of electricity generated through renewable technologies, a payment is made to the generator (the owner of equipment) at a rate that is set for 20 or 25 years, depending on the technology type, and is also index-linked to the rate of inflation. The amount paid varies according to the type of equipment installed, the size of the installation and whether it is installed at “new build” stage or “retro fitted”.

The Feed In Tariff is available for all types of properties – domestic, commercial etc.

There are various ways of financing the equipment. Some prefer to have the equipment installed for free by the installer who then takes the Feed In Tariff to pay for that equipment, but the best rate of return on an investment is achieved through outright ownership. If you would like to know more about options available to you...

Rather like the Feed In Tariff in that it rewards the adoption of renewable energy technologies, the Renewable Heat Incentive is due to begin in the summer of 2011 and applies to technologies that help with generating heat rather than electricity. Again it is a financial reward per unit of heat that is generated through technologies such as “Heat Pumps”, “Solar Thermal Panels” and “Combined Heat & Power”.

There are some grants still available to help with the initial cost of installations, but as my mother used to say: “If you don’t ask, you don’t get” so...

There are different ways in which to fund the installation of renewable energy technologies. By far the most profitable is to buy the equipment outright and benefit fully from the Feed In Tariff or the Renewable Heat Incentive. However, on some projects, the capital expenditure can be large enough to present something of an obstacle. In those circumstances a householder might find it still profitable to add the cost of the installation to their mortgage, paying interest on that extended loan at a lower rate than the rate of approximately 8% which the Feed In Tariff represents as a Return On Investment. Commercial property owners have certain tax incentives to encourage the adoption of renewable energy technologies.

There are also some circumstances under which the installer will help with the cost of installation in return for a share of the Feed In Tariff.

For community groups, charities and social enterprises, there are other financial tools that will help with funding. If you fall into any of these categories...