articles & information > in focus > are renewable energy technologies worth the investment?
This month's article is by Paul Bourgeois, Renewable Energy and Sustainable Construction consultant from Zero Carbon Britain.
In short yes, however there are some caveats and guiding principles to understand before you part with your hard earned capital. Guaranteed payments for up to 25 years with pay back periods of less than 12 years are hard to ignore.
Quality assurance and consumer confidence
The first aspect of renewable energy technology selection to understand are the ‘checks’ you can put in place to ensure you don’t contract a company or have products installed which aren’t quality assured or governed by a set of national standards. The key to this is the Microgeneration Certification Scheme or MCS for short. This Government approved scheme is for installation companies and the products they use and ensures that the installers are appropriately trained and checked periodically, and that the products are fit for purpose. Both installers and products adhere to specified national standards so whether you are in Penzance or Port Talbot everyone works to the same criteria. You can check whether your chosen installer is registered by visiting www.microgenerationcertification.org and using the consumer section. By using an MCS certificated installer who uses MCS certificated products you will be able to access Feed In Tariff (FIT) payments or the recently announced Renewable Heat Incentive (RHI) payments.
Earning a regular income for electricity generated
In April 2010 the UK followed Spain and Germany by offering Feed In Tariff (FIT) payments for electricity generated by solar photo voltaic arrays and wind turbines. These payments are made by energy companies to consumers who generate their electricity in accordance with the MCS and not by the Government as commonly miss construed. Payments are based on kilowatts per hour (kWh) units, the same as the input energy into your home. The crucial point to mention at this point is that you get paid for all the electricity you generate not just the energy you export. So if you are able to use the electricity when it is generated you get paid and save energy company charges, a true win, win situation. In reality though you won’t be able to use all the energy produced at that particular time. To acknowledge this energy companies deem the amount they think you are likely to export and this is set at 50% until homes are fitted with Smart Meters which can measure input and output energy accurately. This deeming is a further bonus because on a typical 2.9kW photo voltaic system on an un-shaded south facing roof of about 35 degrees elevation you could produce 2,150 kWh’s of electricity and get paid £887 per year plus £32 for assumed export. This is all in addition to the actual electricity you don’t pay for which could be as high as £250 per year. So your total annual financial benefit could be nearly £1,200 which is tax free. Furthermore the payments are guaranteed for 25 years for photo voltaic arrays and 20 years for wind turbines. This example is just a snap shot of what could be achievable because FIT payments vary depending on technology output. FIT payments levels are also Retail Price Index (RPI) linked and so from 1st April 2011 payments increase by 4.8%.
What about heat generating technologies?
On 10th March 2011 the Government announced the Renewable Heat Incentive (RHI) which unlike the FIT scheme hadn’t been previously set up in other EU countries. For this scheme the UK Government will be making payments for heat generating technologies such as solar thermal hot water systems, air and ground source heat pumps, and biomass boilers. The Government is keen to harmonise the RHI with the Green Deal which is to be launched in October 2012 so instead of annual payments until that time you will be offering a Premium Payment to cover the intervening time. These will be £300 for solar thermal, £950 for biomass, £1250 for a ground source heat pump and £850 for an air source heat pump, although the air source heat pump figure is still be confirmed officially and probably won’t be supported until October 2012.
Choosing the right technology
If you like the idea of a renewable energy technology for your home it is important to ensure that the most appropriate technology is chosen that not only fits your property but the energy consumption patterns of the occupants. The Energy Saving Trust has a very useful energy selector tool which can be found at www.energysavingtrust.org.uk/renewableselector/start/.
This will help you understand whether electricity or heat generation is more appropriate. Ultimately it will depend on a few key factors; availability of a south facing roof for solar, space for wood or other biomass fuel storage or a heat pump unit, or a large open space for a turbine. Planning permission and conservation area issues are also crucial to consider at the earliest opportunity.
Calculating what is most appropriate
Once you have decided which technology is best then calculating a more accurate financial benefit is probably going to be your next step to ensure you can afford the technology and understand its financial and energy benefits. You can either get an installer to provide a quote and get bespoke performance data for your property or use an online tool to calculate for yourself. The Energy Saving Trust as a tool but other more specific sites such as www.solarinsiders.co.uk have easy to use, comprehensive calculation tools for solar photo voltaic arrays for example with additional parameters to refine the calculation.
Manufacturers and product availability
Renewable energy technology products are made all over the world in more countries than perhaps you could imagine. Currently solar photo voltaic panels are in most demand and therefore can be most price competitive. There are companies assembling panels in the UK, which may be your preference, but it is crucial to understand from your chosen installer the warrantees associated with the products and any degradation in performance over time. This is applicable to all renewable energy technologies.
Buying guides and what to expect
The key to buying a renewable energy technology is to do your homework. Use the tools already mentioned to work out what is best. The golden rule is to get 3 quotes first and then compare and contrast them. Never hand over a deposit without taking time to consider what you have been told. You can even use one of the tools to input the system details you have been offered to see how an unbiased site compares to a company’s output figures. There are also ‘rent a roof’ schemes be offered whereby a company puts panels on your roof for free, let’s you have the free electricity but takes the generation and export tariff. No capital outlay for free electricity can seem like a no brainer but read the small print carefully and choose wisely.
In a nut shell
As a general rule if you have money in a savings account the rate of return on your investment is likely to be far higher with a renewable energy technology, in excess of 6% with the RPI linked growth. If you need to borrow money first then the payback period could well be doubled and be very close the guaranteed number of payment years under the Feed In Tariff. If you do decide to instruct an installation company ask your installer for a testimonial or go to see one of the company’s previous installations.
© Ethical Earth / Zero Carbon Brittain March 2011
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