Grants, Funding and Incentives
There are a number of schemes available to help with the costs of having energy-saving improvements fitted in your home:
Renewable Heat Incentive (RHI)
The Renewable Heat Incentive (RHI) is a UK Government scheme set up to encourage uptake of renewable heat technologies among householders, communities and businesses through the provision of financial incentives. Installations must be carried out by a Registered Microgeneration Scheme (MCS) Installer and the home must have completed a full Green Deal Energy Assessment with an Approved Green Deal Assessor.
Non-domestic RHI scheme
Provides financial incentives to eligible, non-domestic renewable installations for the life of the installations or up to a maximum of 20 years. Non-domestic sectors include industrial, commercial, public and non-for-profit sectors.
Domestic RHI scheme
Regular Tax free payments made quarterly over seven years are available to people hearting their homes using certain renewable energy technologies such as air or ground source heat pumps, biomass boilers, pellet fed biomass stoves with a back boilers and solar thermal panels.
The scheme applies to new installations and is open to homeowners, private landlords, registered social housing providers and self- builders.
The tariff is fixed at the date of installation and is index linked to inflation to maintain ‘real world’ value. Payments are made on pro-rata estimated energy requirements which are determined during the Green Deal Assessment.
A typical 3 bedroom semi-detached house with average insulation using a 20kW heating / hot water load (determined by the Green Deal Assessment) could provide a tax free payment of £2,346 per year (index linked) for 7 years.
Find out more about the RHI from the Energy Saving Trust and about eligibility criteria and the application process at the scheme administrator - Ofgem’s RHI website or contact us and speak to our experts.
A Government-backed scheme to help you make cost-effective energy saving improvements. Instead of paying for the full cost of the improvements up front, you pay over time through a charge added to your electricity bill.
Under the government’s feed-in tariff (FIT) scheme, you’ll be paid for every unit of electricity you generate, whether you use it or not, encouraging homeowners to install PV panels.
The feed-in tariff is guaranteed by the government for 20 years. Payments are tax free (as long as you live in the property rather than rent it out) and will also increase in line with inflation.
If you have a solar PV system installed at home, you’ll benefit in three ways:
- You’ll get paid for all the electricity you produce - This is called the generation tariff. Your electricity supplier will pay you the current FIT rates for every unit of electricity your system generates, whether you use it in your home or not.
- You’ll get extra payment for the electricity you don’t use - Also known as the export tariff. You probably won’t use all the energy you generate, so what’s left over will be exported into the grid. Your electricity provider will pay you an extra 4.5p for every unit. Most suppliers can’t meter this, so they assume you’ll use half the units you produce and pay you for the rest.
- You’ll reduce your energy bills - Electricity generated by your solar panels will feed directly into your house, so it will power any appliances you’re using during daylight hours.
Generation Tariff + Export Tariff + Bill Savings = Annual Benefit
A well-designed 2.88kWp system will receive feed-in tariff (generation and export tariff) payments of £435 a year, and save £177 a year on electricity bills. If the system costs £6,254 to install, it gets a return on investment of 9.78%. That’s before you take predicted energy price rises into account.
With returns like that, it’s no surprise many people are choosing to install solar PV systems as an alternative to investing their money with a bank or building society.
To claim the tariff, your system needs to meet a few simple criteria:
- Your installer must be accredited with the Microgeneration Certification Scheme (MCS).
- Your panels must also be MCS approved, and must be new
- Your system size must be less than 4kWp to qualify for the highest tariff rate. Most domestic systems are well within this limit.
- Your energy supplier must offer FIT payments. The big six suppliers – British Gas, EDF, E.ON, Npower, ScottishPower or Scottish & Southern Energy – are legally obliged to make payments, and many (though not all) smaller suppliers have opted in to the scheme.
- Since 1 April 2012, homes must also meet minimum energy efficiency standards to claim the full tariff. This is explained in more detail below.
Energy performance certificates
From 1 April 2012, only homes that have an energy performance certificate (EPC) at grade D or above will receive the full feed-in tariff
EPCs give homeowners a snapshot of how energy efficient their home is. It shows how your home ranks on a chart of seven coloured bands, ranging from A (the most efficient, in dark green) to G (the worst, in red).
Registering for FITs
Registering for payments is simple. First we’ll add you to the central MCS database, then send you a certificate confirming your system complies with MCS standards. Next, you’ll need to tell your electricity supplier you’d like to register for the FIT and send them a completed application form along with your MCS certificate and the energy performance certificate. Don’t worry, we’ll help with all the paperwork.
Your electricity supplier will check your installation against the MCS database, confirm that the system’s eligible and add you to the Ofgem Central FIT Register. They’ll also let you know when they need you to give meter readings, and tell you when to expect payment.
Grants and Funding
You've got a project with potential, but how do you raise money for it? Whether you're looking to start a new project or develop an existing one, you'll almost certainly need money to make it happen. Find out if there are any applicable funding opportunities from the Energy Saving Trust or contact us and speak to our experts.