Financial support for energy saving and generation

There are government schemes offering financial support for saving energy, using renewable sources and for generating green electricity.  The schemes have changed and will continue to change so it is always essential to find up to date information before committing to expenditure if you wish to take advantage of support.  For that reason no figures are given here for payment levels.

The Feed-in Tariff

Important update – September 2019

The Feed-in Tariff scheme came to an end for new applicants on 31st March 2019.  There is information on this website on how it  has supported renewable electricity generation since 2010 such as on our page covering solar photovoltaics, with case studies.  Information here and on other pages will not be removed as it may be of interest to anyone who buys a house with a PV system that was installed between 2010 and 2019.

Payments are made to generators per kWh (unit of electricity) generated regardless of whether the electricity is used on site or is exported to the grid.  For householders the most relevant technology is Solar Photovoltaics (PV) but the same scheme also supports wind turbines, hydroelectricity, anaerobic digestion and micro combined heat and power (CHP).    Payments are made from an electricity company; most people choose the same company that supplies their electricity but it could be a different one.  In addition to the Feed-in Tariff an export tariff is also paid.  For domestic installations it is deemed that the electricity exported is half that which is generated so the export tariff payments are made on that basis.  Once payments commence they will be made for 20 years and will rise in line with inflation (RPI, the retail price index).

The Feed-in Tariff was designed to support the renewable energy industry in its early stages of development so payments fell in response to the number of installations and falling capital costs.  Official information on the FiT scheme can be found on a page of the ofgem website, but there is a very useful page on the Feed-in Tariff on the YouGen website.  The page gives more details of eligibility and how the scheme works with a long list of FAQs. These include one on the consequences of moving home or buying a house with a PV system.  Up to date Feed-in Tariff rates can be found in the Ofgem tariff tables.

YouGen has an article on How the Feed-in-Tariff ending in April 2019 could affect you.  If you are already receiving FiT payments you will continue to do so.

The Smart Export Guarantee

The Smart Export Guarantee (SEG) is the replacement for the Feed-in Tariff.

It will be available for the usual renewable  technologies up to a capacity of 5 MW, so the scheme will apply to domestic customers, community groups and businesses.Exported power must be metered with a meter capable of recording on a half-hourly basis.All electricity suppliers with more than 150,000 domestic customers will need to provide at least one export tariff (which must be above zero at all times) with effect from 1st January 2020.
For more detailed information on the SEG the following links are useful.
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At the time of writing one company is already providing SEG payments as described on the Solar Trade Association page.  Information will be added there on other providers so it will be a useful source for finding the best prices for selling your surplus electricity. 

SEG payments always will be much less than the cost of purchasing electricity for use in the home.   Without Feed-in Tariff payments it may be worth considering battery storage so as to make use of a higher proportion of the electricity generated.  The YouGen website page on Battery Storage for solar PV is a useful starting point but technologies and costs are changing rapidly so if you are considering battery storage you will need to seek out up to date information.  One example is the YouGen page Breakthrough for batteries? published in September 2019.

The Renewable Heat Incentive

The Renewable Heat Incentive (RHI) is a scheme to give financial incentives to householders, businesses and communities to adopt renewable heat technologies.  The Domestic RHI scheme for homes gives support for three technologies:-

Payments are linked to the heat demand met by the installation (no metering is required) and are made for 7 years with links to inflation (RPI).  There is a degression system similar to that mentioned above for the Feed-in Tariff under which payments will be reduced in line with the number of installations supported by RHI.  There is also a non-domestic RHI scheme that covers a wider range of technologies and does require metering of the heat supplied.  Payments are made for 20 years.

The YouGen website page on the Renewable Heat Incentive is a useful source of information on both the domestic and non-domestic versions of the scheme,  as is the September 2019 update RHI: things to watch out for.  Full details of the scheme, tariff rates and the application forms are available on ofgem pages for domestic RHI and non-domestic RHI.

Energy Company Obligation

ECO is a Government programme to make houses in the UK more energy efficiency, also aiming to cut carbon emissions and reduce fuel poverty.   Grants may be available for new boilers or for insulation but only for householders in receipt of benefits. However the list of relevant benefits is a long one including Child Tax Credit and Working Tax Credit, so many people will be eligible.

It is not easy to get up to date information from Government websites.  The Ofgem site at www.ofgem.gov.uk/environmental-programmes/eco is not easy to use and may not tell you what you want to know.  There are some details on the websites of all of the major energy supply companies (those with more than 250,000 household customwrs) as they fund the scheme.

The independent consumer body Which? has a useful web page that introduces the ECO scheme at www.which.co.uk/reviews/home-grants/article/home-grants/energy-company-obligation-eco

Boiler Grants is a website owned by a media company that has funding from ECO to promote the scheme. It offers an online form to check eligibility for grants and arrages home visits from qualified surveyors to approve the grants.  Grants cover replacement costs for gas, oil or LPG boilers that are more than 8 years old, but as of August 2017 funding for gas boiler replacements is very limited.  The scheme also covers insulation.

The Green Deal

The Green Deal is a loan scheme to cover the costs of energy efficiency improvements that will result in lower energy bills with savings greater than the costs of the improvement measures (the ‘golden rule’).  Repayments are made via a charge on the home electricity bill at a fixed rate of interest.  If a householder moves the new owners or tenants will pay the charge as they will continue to benefit from lower bills.  There were many Green Deal Providers of insulation and a variety of renewable technologies that could be financed under the original version of the scheme but it collapsed in July 2015.  There is likely to be a lot of out of date information available on the Internet.

The assets of the Green Deal Finance Company that backed the loans under the original scheme were acquired by new owners in January 2017.  The company began financing loans again in May 2017, working with a small number of selected Green Deal Providers.  The initial focus is on replacement boilers but finance is also available for insulation, ground source heat pumps and air source heat pumps.  The new scheme is being ‘soft launched’ with minimal publicity.  Gradual expansion in terms of the number of providers and the range of technologies should ensure stability of a potentially very useful scheme.

Independent advice on how the new scheme works and its benefits can be found on the YouGen website page on the Green Deal.  To find out more and to strat the process of applying for a loan visit the website of the Green Deal Finance Company.

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