| The Renewable Heat Incentive is part of the | | | | energy you produce. The aim of these two |
| Governments Clean Energy Cashback initiative which | | | | incentives is to try and entice homeowners and |
| aims to increase the amount renewable energy | | | | businesses to swap their old oil boilers for cleaner |
| produced. Currently only 2 % of all the energy the | | | | renewable energy systems such as solar heating and |
| UK is produced from renewable sources and the | | | | solar heating. |
| Government want this to increase to 15% by 2020. | | | | The Government is being generous as they |
| This is because the EU Renewable Energy Directive | | | | understand that installing such systems is more |
| have a legally binding contract with the Government | | | | expensive than continuing to buy energy from the |
| to ensure these targets are met. | | | | grid. Either of these new tariffs will generate a |
| On April the 1st 2010 the first of these initiatives go | | | | significant financial return for homeowners investing in |
| live in the form of 'Feed-In Tariffs' which aims to pay | | | | renewable energy system. Better still is that |
| homeowners and businesses a set price for producing | | | | homeowners are eligible for payments for every |
| their own energy through renewable sources and | | | | technology they invest in, not just ones. It is |
| pays to buy excess energy from them to feed back | | | | estimated to take between 7-9 years for the full |
| into the Nation Grid. | | | | cost of installing a renewable heat source to be |
| Renewable Heat Incentive is a secondary tariff which | | | | re-paid, however the tariff payments last between |
| aims to go live in Aril 2011, which will differ slightly in | | | | 15-23 years. |
| that it is administered directly from Ofgem for the | | | | Therefore, once you have paid off the installation |
| sale of fossil heating fuels. These payments are | | | | costs, you will still be benefitting from much lower |
| designed to generate a 12% a year return on | | | | energy bills as well as continuing to receive the tariff |
| investment as a reward for producing your own heat. | | | | payments. An added bonus is that these payments |
| The tariffs work by paying up to 18p/kWhr to a | | | | are tax-free so you will never be taxed on the |
| household for producing it's own hot water and heat. | | | | amount you receive. This makes the installation of |
| This means installing a renewable heating system | | | | any type of renewable energy system inviting and |
| such as an air source heat pump, not only reduces | | | | not only will you receive lower energy bills, you will be |
| your energy bills due to a reduce in the amount you | | | | part of a significant step to decrease harmful carbon |
| have to buy from the grid, but means the | | | | emissions and more specifically, your own carbon |
| Government will pay you a set amount for the | | | | footprint. |