How to install renewable technologies for free or at low cost Jos Mister Yorkshire and Humber Microgeneration Partnership The Yorkshire and Humber Microgeneration Partnership • A unique association of over 60 of the main companies and organisations involved in the renewable energy industry in our region. • Set up as a Community Interest Company our members include installers, community groups, training providers and manufacturers. • We provide a combination of free, impartial advice, MCS accredited expert installers and quality products Overview • Policy Background • Why install? • Generating Electricity from Renewable Sources – Feed in Tariffs (FiTs) – The generating technologies • Generating Heat from Renewable Sources – Renewable Heat Incentive (RHI) Phase 1 – The generating technologies • Green Deal and Renewable Energy Measures • The Yorkshire and Humber Microgeneration Partnership “ The cheapest way of closing the gap between supply and demand, reducing our energy bills and carbon is through greater energy efficiency and a better understanding of energy use. However, energy efficiency alone will not solve the problem. We also need to green our energy supply and reduce our reliance on fossil fuels.” Greg Barker, Minister of State Department of Energy and Climate Change Why install renewable energy • Reduce your carbon footprint • Reduce the impact of rising fuel prices – future proofing your business • Demonstrate green credentials • Potentially generate a long term, guaranteed income • Save money on fuel bills Generating Electricity from Renewable sources - Feed in Tariffs (FiTs) - The generating technologies - Solar PV - Wind - Hydro - Micro CHP - Anaerobic Digestion Feed in Tariffs (FiTs)- Key points • Rewards consumers producing electricity from renewable technologies – Solar PV, Wind turbines, Micro-hydro and Micro-CHP (domestic only). • It does this by guaranteeing a minimum payment for the electricity generated as well as the electricity exported to grid. • Applicable for all UK (except Northern Ireland) for Households, Communities and Businesses. Feed in Tariff • Generation tariff A payment for every kWh generated • Export tariff An additional payment for every kWh exported to the local electricity network • Avoided costs Additional benefit from usage of electricity “onsite” Feed in Tariffs (FiTs)- Key points • Tariff levels are index linked to the Retail Price Index (RPI) which ensures they rise (or fall) with inflation, and will last for 20 years (except for MicroCHP -10 years) • Ofgem administer the Feed-In-Tariff scheme and electricity suppliers are responsible for paying their customers. • Customers must use certified installers and products through the Microgeneration Certification Scheme (MCS) for all projects under 50kW Solar PV - Key issues to consider • Need a south facing roof with little or no shading • The ideal roof angle is 30 degrees • Classed as a ‘permitted development’ under Planning Regulations for most properties, but you need planning permission for conservation areas and listed buildings as well as installations over 50kW • Buildings with a significant electricity demand in the day will benefit most FiT rates for solar PV Band (kW) Current generation tariff (p/kWh) New generation tariff from 1st July (p/kWh) 14.9 <4kW 15.44 13.5 >4-10kW 13.99 12.57 >10-50kW 13.03 11.10 >50-100kW 11.10 11.10 >100-150kW 11.10 10.62 >150-250kW 10.62 6.85 >250kW-5MW 6.85 6.85 stand alone 6.85 4.64 Generation Tariff 4.64 Tariff lifetime is 20 years. Tariff degression (reduction) takes place each quarter based on previous deployment, but only applies to new entrants to the scheme. Energy Efficiency Requirement and Exemption for Communities • To be eligible for the full rate FiT for solar PV the property needs to have an Energy Performance Certificate of level D (EPC level D) or above (domestic and non-domestic). • Lower rate is the same as the stand alone rate – currently 6.85p/kWh • However non-domestic ‘community energy projects’ are exempt from this requirement. They still need to obtain an Energy Performance Certificate, but not at a specific level. • Community is defined as – a community interest company (CIC); – a co-operative society; or – a community benefit society Worked example - Annual financial benefit for an average 10kW Solar PV installation May 2013. Installed cost £17-20k Generation Tariff – 13.5 p/kWh Export Tariff– 4.64p/kWh Avoided Costs 14p/kWh Expected performance 8,900 kWh Assume 50% exported Assume 50% used in the property 8,000 kWh x13.5p £1,201.5 4,450 kWh x 4.64p £206.5 4,450 kWh x 14p £ 623 Note - this does not take into account impact on property value or the rising £2,031 costs of grid electricity which will both have an additional beneficial impact ‘Free PV’ schemes • There are still a small number of schemes available that offer ‘Free PV’. • These schemes effectively rent your roof. The installer keeps all the FiT income, but the occupier gets to use the electricity free of charge, or at a reduced rate • Using our previous example of a 10kW array, and assuming 50% of the electricity is used, this would result in an annual saving of £623 • This will tie you into a 20 year contract – need to look very closely at the small print Companies offering ‘Free PV’ schemes • Solar Europa www.solareuropa.co.uk • The Energy Saving Trust maintain a national list http://tinyurl.com/c3dqgbe Wind - Key issues to consider • Wind turbines work most efficiently when located in an area with unobstructed wind flow, and mounted on a pole or mast • Planning issues such as visual impact, noise and conservation issues have to be considered. • Installation normally requires permission from the local authority. FiT rates for wind turbines Scale Current generation tariff (p/kWh) 21 <15kW 21.65 15-100kW 18.04 100-500kW 9.79 500kW-1.5MW 4.64 Export tariff Tariff lifetime is 20 years Tariff degression (reduction) will take place annually from April 2014, but only applies to new entrants to the scheme. Worked example - 6kWp pole mounted wind turbine in a good location installed in May 2013 – annual benefit. Installed cost £27 - 30K Generation Tariff – 21.65p/kWh Expected performance 10,000kWh 10,000 kWh x21.65p £2,165 Export Tariff – 4.64p/kWh Assume 6,000kWh exported 6,000 kWh x 4.64p £278.4 Avoided Costs 14p/kWh Assume 4,000kWh used in the property 4,000 kWh x 14p £560 Note - this does not take into account impact on property value or the rising costs of grid electricity which will both have an additional beneficial impact £3,003.4 Free Wind Schemes • Similar to the ‘free PV’ model – you allow a wind turbine to be installed our your land and receive the electricity it generates for free whilst the company takes the FiT payment. • Models vary – some offer a percentage of the FiT income instead • Less likely to be viable for urban buildings as installers are looking for rural locations with high wind speeds. Also require some distance away from obstructions such as buildings and trees. Companies offering ‘free wind turbines’ • Windcrop www.windcrop.co.uk • Evoco Energy www.evocoenergy.co.uk Companies offering wind turbines finance • British Eco www.britisheco.com • Investment Renewables www.investmentrenewables.co.uk Generating Heat from Renewable sources o The Renewable Heat Incentive (RHI) o Phase 1 from November 2011 o Phase 2 from Spring 2014 o The generating technologies o Heat pumps o Biomass boilers o Solar thermal Renewable Heat Incentive The Renewable Heat Incentive, which is the first of its kind in the world, has been launched to encourage the installation of renewable heat equipment such as solar thermal, biomass boilers and heat pumps by providing incentive payments for each kWh of renewable heat generated Phase One is for non-domestic installations opened for applications in November 2011 Phase Two will be for domestic properties and is expected spring 2014 Renewable Heat Incentive (RHI) Phase 1- Key points o Tariff levels are index linked to the Retail Price Index (RPI) which ensures they rise (or fall) with inflation, and will last for 20 years o Ofgem administer and implements the RHI, and makes the quarterly payments o Customers must use certified installers and products through the Microgeneration Certification Scheme (MCS) for all projects under 50kW o RHI tariffs are designed to achieve a 12% annual rate of return for those installing most types of renewable heat systems, except for solar thermal which is lower Comparative Fuel Costs Fuel Pence per kWh Wood Chips (30% moisture content) 2.9p/kWh Wood pellets Natural Gas Heating Oil LPG Electricity 4.2 p/kWh 4.8 p/kWh 6.0 p/kWh 7.6 p/kWh 14.5 p/kWh Source – Biomass Energy Centre Technology – Heat Pumps • Heat pumps are familiar to us - fridges and air conditioners are two examples. • Ground source heat pumps (GSHP) transfer heat from the ground into a building to provide space heating and, in some cases, to pre-heat hot water. • For every unit of electricity used to pump the heat, 3-4 units of heat are produced. As well as ground source heat pumps, air source and water source heat pumps are also available. • Only really appropriate for well insulated buildings Heat pumps and the RHI Phase 1 • Only ground and water source heat pumps are eligible for phase 1 of the RHI (air source under consultation) • Must have a Co-efficient of Performance (COP) of 2.9 or above • The coefficient of performance is defined in the Regulations as ‘the ratio of the amount of heating or cooling in kilowatts provided by a heat pump to the kilowatts of power consumed by the heat pump’. Tariff name Small ground source Large ground source Eligible technology Eligible sizes Ground-source heat pumps; Less than 100 kWth Water-source heat pumps; Deep geothermal 100 kWth and above Tariff rate (p/kWh) 4.8 3.5 1st Successful applicant for the RHI Phase 1 • 24kW Ground Source Heat Pump at Booth Brothers Printing in South Yorkshire • Accredited under the small heat pumps tariff of 4.5p/kWh • Will generate an inflation linked RHI payment of £2,600 per annum for twenty years. • Installed by YHMP member Earthtest Energy Generating heat - Biomass • Wood-fuelled heating systems, also called biomass systems, burn wood pellets, chips or logs to provide warmth in a single room or to power central heating and hot water boilers. • Installing a biomas boiler can significantly reduce costs, especially when replacing electric heaters, solid fuel or oil fired boilers • Higher maintenance than a standard gas or oil boiler. • Need to consider space to store pellets, as well as cost and security of fuel supply. Biomass and the RHI Phase 1 Tariff name Small biomass Medium biomass Large biomass Eligible technology Eligible sizes Less then 200 kWth Tariff rate (p/kWh) Tier 1: 8.6 Tier 2: 2.2 Solid biomass; Municipal Solid Waste 200 kWth and above; less Tier 1: 5.3 than 1000 kWth (incl. CHP) Tier 2: 2.2 1000 kWth and above 1.0 •The two-tier tariff approach is only used for small and medium sized biomass boilers . •In each year the Tier 1 tariff is paid until the system has operated up to 15% of the annual rated output (i.e. the equivalent of 1,314 hours at the rated capacity of the installation). For the rest of the output in the year, the Tier 2 tariff will apply. Free Biomass schemes • Similar to the ‘free PV’ model – the installer leases the boiler room from you and owns the biomass plant, as well as providing maintenance. • The installer gets the RHI payment. You need to supply the fuel for the biomass boiler, but will benefit from much lower heating bills. • Different companies offering different schemes. Most involve a 20 year contract, and require a relatively high heat demand. Companies offering free biomass schemes • Strategic Energy www.snrgy.co.uk • Morri Consult www.morriconsult.co.uk Free Biomass – worked example Existing Oil System New Biomass System Heat Requirement of Building 400 MWh 400 MWh Efficiencies 85% (Current Boiler Efficiency) 5% (Pipe Work Losses Only) 1 Energy Usage 470.59 MWh 2 421.05 MWh 3 Energy Cost p/kWh 6.50p 5.00p 4 Annual Energy Costs £30,588 £21,053 Annual Maintenance Charge £500 £0 5 Total Charges Per Annum £21,053 £31,088 Energy Savings Per Annum n/a £10,036 (32%) Solar Thermal and the RHI Phase 1 • Planning permission is not usually an issue – solar hot water systems are classified at Permitted Developments in most circumstances. • The key issue is the demand for hot water in the building – in many cases there will not be sufficient demand for hot water to make the project financially viable. Tariff name Eligible technology Eligible sizes Tariff rate (p/kWh) Solar thermal Less than 200 kWth 9.2 Solar thermal Renewable Energy and the Green Deal • Nine main microgeneration technologies included in the list of approved measures for the Green Deal Air source heat Ground source pumps heat pumps Solar PV (excluded from ECO) Biomass boilers Micro wind generation Solar water heating Biomass room Water source heat Micro combined heaters pumps heat and power Renewable Energy and the Green Deal • In determining whether renewable energy measures meet the Golden Rule only the saving from future fuel bills - not the FiT or RHI revenue- will be considered. • It is thought that this will exclude renewable technologies from being fully funded in the majority of cases. • A Green Deal loan to cover a proportion of the capital cost may be available. Jos Mister – Secretariat [email protected] www.yhmp.org