It Will Take Decades To Recoup Costs For Green Technologies
By Cynthia Taylor
Home-owners will be in a position to claim hundreds of pounds annually for green technologies that will warm homes, such as, solar heating systems for hot water, from next year under the governments flagship renewable energy schemes. However, the Guardian has done analysis that has shown despite the increases in government payments that were announced last Friday, it will take decades for householders to be able to recoup the costs paid upfront for the installations of these green incentives.
Under the RHI (Renewable Heat Incentive) home-owners will receive payment for energy, that is generated by installing solar thermal panels, heat pumps, biomass boilers which are installed at their own costs.
When the government announced last year, the Guardian did estimates, and found that it would take 20 years for homes that had oil heating, to be able to recoup the initial outlay of £3,000 for the solar thermal unit.
With the new tariffs, which will be available in Spring, owners are to receive about £220 for the first seven years, as well as the savings of about £80 annually on their bills, this means that the recouping process would be reduced to 18 instead of 20 years. The savings for households that are heated by gas will be significantly less.
The set tariff levels were:
These figures are mainly in line, or conservatively higher, than the ranges indicated, that were published last year, which wer.
Minister for energy and climate change Greg Barker has said that the focus for this plan was the 1/5th of houses in the UK who are off the gas grid and are facing expensive heating costs, however, he would not be drawn on the exact time-lines for the recovery of outlays, good for people who are living off the gas grid and who will face very expensive heating costs.
Mr. Barker said that the tariffs are not available for 'new builds' as they are able to 'drive' innovation and the carbon reduction policies in new buildings via building regulations.
Mike Landy from Renewable Energy Association, has said that the announcement, despite the many delays, was welcomed. Mr. Landy continued that after the delays and the stagnation in the energy market, this announcement will offer a big boost to the domestic industry for renewable heat.
Companies will be able to advise home-owners on the exact amount of financial support they will receive, from using renewable heating systems. He said that green heat could be very cost-effective particularly for homes that are off the gas grid.
James Court, policy manager of Consumer Futures, said said that the watchdog felt that upfront technology costs could restrict uptake within the lower-income homes despite the Green Deal's loan scheme.
He felt that there should be more help with regard to the upfront costs, to ensure that people who were fuel poor could have access to renewable heat.
Mr. Court said that they were quite sure about the way people will react to the Green Deal; he said it would appear as a debt, which means that people will be hesitant to put themselves into more debt, therefore he felt that the Green Deal is not the correct mechanism for fuel poverty people to be able to access renewable heat..
Concern was also expressed at the complexity that is involved in the RHI and he said that tariff system could result in confusion amongst home-owners.
Mr. Court also mentioned that there should be strong protections to be put in place to ensure that consumers were not being 'mis-sold', the the scope of confusion over usage, misleading financial claims, and complex 7 year tariff structures.
The RHI has had several different false delays and downs. Under the Renewable Heat Premium payment, which was an interim grant scheme that was introduced, while they were finalising the details of the RHI, over a two year period, 11,000 homes were fitted.
The DECC said that if the RHI met its target of 750,000 installations in homes, then this could represent a savings of about 17m tonnes of Carbon Dioxide over its lifetime.
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