The Feed In Tariff and Renewable Heat Incentive explained....

Depending where you look, the UK Goverment is obligated to provide anywhere from 12%-15% of UK heat from renewable technology. This is not only intended to reduce CO2 emissions but also to increase the security of supply of UK energy - in 2008 the UK imported 25% of it's natural gas with a projected increase to 60% by 2020.

Air conditioning systems have moved on a long way over the last few years, not only do they cool & heat to provide a comfortable environment but they can also recover energy that can be used to provide under-floor heating, radiator heating and direct hot water.

You may have already heard about "heat pump boilers" (HPB), this is the product that you can attach to your Air Conditioning system that provides the low cost heating & hot water in a commercial application. In most cases you would tend to find a significant reduction in heating against traditional fuels and a significant reduction in running costs. In this commercial application you would also by selecting ECA approved equipment be eligible for a further one off rebate on the "total" cost of equipment, installation based on your corporation tax. Applications can be Air Sourced or Ground Sourced both can provide HIGH COP results thus reducing energy costs.

There is also a domestic "heat pump boiler", this is one of the few key growth area's in the UK currently as around 47% of the UK's CO2 emissions and 60% of average domestic energy consumption comes from this market.

By moving away from fossil fuels and embracing, HPB, PV Panels you could effectivley claim for the "feed in tariff" currently and the new "Renewable Heat Incentive" when it comes into place next year.

Most of the premier brands in the UK can offer these products, a couple have gone a step further and have added to their renewable products range with the introduction of a Heat Pump Air Curtain this is based on the same principal as the HPB technology 1kw of power in and 3kw of power out - against direct electric products significant CO2 and Running cost savings can be achieved.

So where does the FIT and RHI help you out...a good example would be to look at a typical UK 3 bed house, as this would be the typical installation. A typical 5kw Air Sourced Mitsubishi Ecodan Package System with PV Panel, installed would be somewhere in the region of around £10,000 - £12,000

Feed In Tariff:
The average house will use around 4,500 kilowatt hours per year, if you were to install a 2.5kw solar PV panel this would produce, 2,500 kilowatt hours per year paying the homeowner around £800 a year - tax free and cheaper all year round electricity.

Renewable Heat Incentive:
Another example, the average house uses around 15,000 kilowatt hours of heat per year, if you installed solar panels and a "heat pump boiler" around 13,700 kilowatt of heat could be generated paying the homeowner over £1,000 per year - the FIT was confirmed as being tax exempt, we would expect the same to be for the RHI although to date nothing has been confirmed.

Proposed Tarriff's have been disclosed as the following:

Ground Source HPB (up to 45kw) 7 pence per kilowatt hour for 23 years.

Air Source HPB (up to 45kw) 7.5 pence per kilowatt hour for 18 years.

If you think about the return on investment - 12% for Heat Pumps - is better than an ISA!