There has never been a better time for businesses to invest in renewable energy technology. With the introduction of the government’s Renewable Heat Incentive (RHI) to encourage the commercial sector to generate heat from a renewable source, more and more companies have been signing up to the scheme and are now benefitting from lower energy bills, reduced carbon output and financial reward.
RHI is a trail blazing government scheme designed to encourage the commercial sector to reduce their dependence on fossil fuels for heating to help the UK meet EU targets to reduce carbon dioxide (CO2). The scheme offers a financial incentive for businesses that install a renewable energy system and includes biomass, some types of ground source and air source heat pumps, solar thermal and biomethane. Index linked payments begin to accrue from the date of accreditation of the installation for up to 20 years, with the amount being based on the actual heat output of the system.
Businesses that choose to install a solar PV system may be eligible to receive tax free payments under the government’s Feed-in Tariff scheme (FIT). The scheme was introduced in the UK in April 2010 and many companies have subsequently signed up to reduce their electricity consumption and benefit from quarterly payments. FITs allow businesses with a renewable energy source producing under 5mw in capacity to be paid for the electricity they generate, whether or not the electricity generated is not used by their company. Any unused electricity can be sold back to the National Grid. FIT rates are guaranteed at the same index-linked rate for 20 years, and are set at the date of installation but it is the intention that these will reduce every three months for new applicants, so it pays to sign up early.
At a time when businesses are under pressure to reduce overheads and to address the impact of their carbon footprint on the planet, it makes both economic and environmental sense to invest in renewable energy technology.