Over the last 30 years or more, the UK has found itself in a privileged position with a plentiful supply of home-produced oil and gas as well as an excellent distribution system. Most homes and businesses have had the option to connect to (cheap) mains gas. However, this is now changing as we are no longer self-sufficient and as a consequence, are open to political and market volatility. This, in our view at Carbon Zero Consulting, is the major driver to promote the uptake of Renewable Energy Technologies. The other main driver is new UK regulation, which can provide you with incentives to install Renewable Energy Technology, and can pay you to produce green energy. The table below shows how much you could earn under the Renewable Heat Incentive scheme.

In 2011, the UK Energy Act provided the basis for a step change in the provision of Renewable Energy alternatives for domestic homes and businesses. The main policies covering Renewable Energy are:

1. Feed-in Tariffs (FIT)

The purpose of the Feed In Tariffs, is to encourage deployment of small-scale (less than 5MW) renewable electricity generation. The technologies currently covered by the FITs are: solar photovoltaics (PV), also known as solar panels, hydro-electric schemes, anaerobic digestion (AD), also known as biomass energy, wind power and domestic scale microCHP (micro combined heat and power).

The goal is to encourage uptake of investment in small-scale renewable electricity by providing financial incentives for power generated by renewable means. Power generators (such as solar panels) receive payment from the electricity supplier of their choice for the electricity they generate and use, as well as payment for unused electricity exported back to the grid.

For more information, please see Feed-In Tariffs.

2. Renewable Heat Incentive (RHI)

The Renewable Heat Incentive is a tariff scheme similar to the FITs, payable to energy users generating their own renewable heat. The first phase of the scheme is for non-domestic heat generation, which came in to force at the end of November 2011. The technologies supported include:

The Domestic Renewable Heat Incentive (Domestic RHI) is the second phase of the RHI scheme to support household schemes. Implementation was in May of 2014 and is designed to align with the Green Deal.

For more information pleases see the Renewable Heat Incentive.

3. Renewables Obligation (RO)

The Renewables Obligation (RO) is the mechanism for supporting large-scale generation of renewable electricity. The RO works by placing an obligation on licensed electricity suppliers to source a specified and annually increasing proportion of their electricity sales from renewable sources. Electricity suppliers can purchase Renewable Obligation Certificates (ROCs) from accredited renewable electricity generators.

For more information, please see the Renewables Obligation.

4. Green Deal

The Energy Act 2011 created a new financing framework enabling the provision of fixed improvements to the energy efficiency of households and non-domestic properties, funded by a charge on energy bills that avoids the need for consumers to pay upfront costs.

For more information, please see the Green Deal.

With thanks to the REA for supplying some of the information above.

The table below shows how much money you could earn by switching to Renewable Energy Technologies to generate your heat and electricity on a domestic scale.

If we use the average household consumption figures based on the 2011 study, 3300kWh of electricity and 16500kWh of gas* per household,  we can calculate that if that electricity was generated by solar panels, you could earn £633.30 under the Domestic RHI. If you generated your heat from a biomass boiler, you could earn £2,013, and if you used ground source heating from groundwater, you could earn £3,102.

Renewable Heat Incentive Commercial Scale RHI tariffs pence/kWh
revised rates
Ground source heat pumps all scales 8.7
Air to water heat pumps all scales 2.5
Solar thermal up to 200 kW 10.0
Solid biomass (Wood chip or pellet) up to 200 kW 7.6
Solid biomass (Wood chip or pellet) 200-1,000 kW 5.1
Solid biomass (Wood chip or pellet) over 1,000 kW 2.0

*Ofgem Typical Domestic Energy Consumption Figures, 2011.