FiT & RHI – 7 Year Payback Still Possible
March 30, 2018
The FiT (Feed in Tariff) and RHI (Renewable Heat Incentive) are financial inducements introduced by the government several years ago to promote the take-up of renewable energy technologies. They are effectively subsidies to encourage the use of renewable energy technologies. The rates are set by the Department for Business, Energy and Industrial Strategy (BEIS), formerly known as the Department of Energy and Climate Change (DECC).
Since the Industrial Revolution, which started in Great Britain in 1760, the UK and all other industrialised nations have been almost entirely dependent on finite supplies of fossil fuels such as coal, oil and natural gas for fuel. Furthermore, the use of these fossil fuels produces greenhouse gases such as carbon dioxide which cause harm to the environment.
Renewable energy technologies are not finite because they are “renewable”. They are also by their nature lower in emissions of greenhouse gases than non-renewable energy technologies.
To reduce environmental impact and to ensure sustainable fuel supplies in the future continual innovation of renewable energy technologies is considered essential.
Increased use of renewable energy technologies forces the down the cost. This makes renewable energy technologies more and more affordable as the cost continues to come down. It also fosters further innovation. For example, the cost of a typical domestic photo-voltaic (PV) installation for a private home has fallen from around £20,000 in 2008 to £5,000 in 2017.
As the cost of renewable energy technologies has fallen so too has the value of the FiT and RHI Tariffs to new entrants. At present, the tariffs are reviewed every 3 months.
Despite the reduction in tariffs however, it is still possible to get a 7 year payback on a renewable energy installation with the tariff payments continuing in total for up to 20 years. Why? Because the “regression” (decreases) in the tariffs is designed to ensure typically a 7 year payback as the cost of the technologies continues to fall.
Interested? If you are thinking of installing renewable energy technologies on a building project call EDP Environmental on 01392-367237 and speak to Ian, Steve or Rob. Tell us about your project and we will give you some idea of what you could do, how much it would cost and the likely payback and return on investment (ROI).
Please note that we do not sell or install renewable technologies. We simply offer impartial technical and practical advice. Call us now on 01392-367237.