Funding incentives for energy saving and micro-generation

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1 Funding incentives for energy saving and micro-generation Alan Grant Outreach Officer Energy Saving Scotland advice centre Highlands and Islands 11 September 2010

2 Energy Efficiency in the Home 25% Loft Insulation saves 205 Cavity Wall Insulation saves % 15% Double Glazing saves % 15% Floor Insulation saves 40 Draught Proofing saves 35 2

3 Things we can all do Check your tarrif Direct Debit Monitor your usage Power down and switch off Fill in a Home Energy Check Visit 3

4 Cause/Effect of Fuel Poverty Causes of fuel poverty - Fuel prices - Household Income - Occupancy rates - Energy efficiency of housing stock Effects of fuel poverty - Not just financial!

5 Fuel Poverty in Scotland 1 in 4 households 850,000 households currently affected 1% increase in price = 8000 households in fuel poverty

6 Highlands and Islands Fuel poverty estimated to be higher in rural H&I due to: Lower average incomes High numbers of traditional stone built 1½ storey houses Not connected to the gas grid 6

7 Aims of the Energy Assistance Package Maximise total numbers benefiting Increase incomes Reduce fuel bills Maximise insulation uptake Improve energy efficiency of the home

8 Accessing the Energy Assistance Package Customer contacts Adviser will take customer through a series of questions The customer will receive: - energy advice - a FREE home energy report - summary of eligibility for further help

9 Energy Saving Scotland home renewables advice Scotland wide service delivered by the five Energy Saving Scotland advice centres. Team of advisors, 1 dedicated and 7 Outreach Officers throughout the Highland and Island area. The service is open to any householder with a realistic interest in installing a renewable energy system for their main residence. 9

10 Free home visit: Reduced SAP survey on household. Impartial advice and recommendations on practical energy efficiency measures and renewable technologies. Advice on financial incentives, and next steps to take. We try to advise on practical options for customer in their current circumstances, but also for the property in general should they decide to sell. 10

11 Post Visit: Personalised report summarising home visit discussions, and further detail on recommendations. Referrals for any available energy efficiency grant funding. On-going support with any issues throughout the system planning and installation process. 11

12 Financial Incentives Feed-In-Tariff / Clean Energy Cashback Introduced in April 2010 Renewable Heat Incentive Due to be introduced in April

13 Feed-in-Tariff / Clean Energy Cashback Incentive for electricity producing technologies, from April 2010 Generation Tariff Set payment for every kilowatt generated Export Tariff Flat rate of 3p per kw, or customer can negotiate separate deal with energy company Installations commissioned from 15th July 2009 are eligible for full tariff Payments no less frequent than quarterly 13

14 Tariff Levels Generation tariff Most important for householders are: PV (<4kW) retrofit: 41.3p/kWh PV (<4kW) newbuild: 36.1p/kWh Wind (<1.5kW): 34.5p/kWh Wind (1.5-15kW): 26.7p/kWh In context, on average we pay 13p/kWh to import Export tariff 3p/kWh 14

15 Worked example Total electricity demand of house = 4000kwhr/year 2.5kW Wind Turbine Total generation (4,500kWh) Income 1, Onsite use (2250 kwh) saved Export (2250kWh) Income Total saving /year, gives a payback period of around 15 years. 15

16 Process for receiving FITs Basic EE measures in place Decide on which technology and check planning 3 quotes from MCS installer Install technology Installation registered with Ofgem Inform energy supplier of completion You receive FITs 16

17 Additional information Income generated through FITs are tax free for domestic customers Indexation of all tariffs by the Retail Price Index in future years ensuring they rise with inflation Tariff level decreases each year for new entrants (as of 2012) Up to landlords and tenants of properties to come to an arrangement about receipt of payments. In general, ownership of payments belong to property holder e.g. person sells property - FIT stays with property 17

18 Renewable Heat Incentive Scheme similar to Clean Energy Cashback, but for heat producing technologies Expected to start in April 2011, under consultation at the moment so no details confirmed yet. Proposals are: Scheme will support air, water and ground-source heat pumps, solar thermal, biomass boilers, renewable combined heat and power Output will not be metered, but deemed based upon reasonable heat requirement which the installation is intended to serve Payments will last for the expected lifetime of technology. Consultation documents can be found here: 18

19 RHI Worked Example Average 3 bed semi-detached house with decent insulation, likely to have a deemed heat requirement of around kWhr / year Wood fuel boiler system costing around 10,000 RHI would give an annual payment of x 9 pence = 1,170 per year, for 15 years. Therefore simple payback period is 10,000 / 1,170 = 8.5 years 19

20 Other Grants Available Energy Saving Trust Home Loan Scheme Home Insulation Scheme areas only Interest Free Small Business Loan also available for private landlords 20

21 What is no longer available Renewables Grants Closed on 23 rd July! Boiler Scrappage Scheme Communities and Renewable Energy Scheme 21

22 Web sites Energy Saving Trust For Home Energy Generation Selector and FIT calculator, advice on EE. Microgeneration Certification Scheme (MCS) For certified installers and products 22