The ‘new’ - micro renewable energy and
refurbishment incentive schemesGreen Deal
Renewable Heat Incentive
Feed in Tariff
Nick Tune, Director BRE Wales
It’s not easy being green!
Introduction
• The UK Government have developed 3
schemes for micro renewable energy
and low energy refurbishment
– The Feed in Tariff – finance scheme
for electricity generating renewable
energyenergy
– The Renewable Heat Incentive –
finance scheme for heat generating
renewable energy
– The Green Deal – ‘pay as you save’
scheme for building refurbishment
Feed in Tariff
• Started April 1st 2010 Tariff is RPI linked and guaranteed for 25 yrs
• Highest generation rate available until 2012, then decreases for new entrants
• Tariffs paid by a utility company, administered by Ofgem
• Electricity not used can be exported
• You do not need to be the building owner to claim the generation tariff• You do not need to be the building owner to claim the generation tariff
• Significant alterations in market conditions since introduction
Installations to November 2010
Simple Payback Example
• Solar PV
• 10 kW on roof
• Installed price £35k
• Generation 8,500kWh/yr
• Generation tariff 36.1p/kWhr• Generation tariff 36.1p/kWhr
• Simple payback 11 years
• Gross earnings £79,900
FITs in Practice – domestic example
Generation Tariffs - originally
Technology Scale Generation Tariff
2010 (p/kWhr)
Tariff Lifetime
(years)
PV ≤ 4kW (new build) 36.1 25
PV ≤ 4kW (retrofit) 41.3 25
PV > 4-10kW 36.1 25
PV > 10-100kW 31.4 25
PV > 100kW-5MW 29.3 25PV > 100kW-5MW 29.3 25
PV Stand alone system 29.3 25
Wind ≤ 1.5kW 34.5 20
Wind > 1.5-15kW 26.7 20
Wind > 15kW-100kW 24.1 20
Wind > 100-500kW 18.8 20
Wind > 500kW-1.5MW 9.4 20
Wind > 1.5MW-5MW 4.5 20
Generation Tariffs following First Review
Technology Scale Generation Tariff
2010 (p/kWhr)
Tariff Lifetime
(years)
PV ≤ 4kW (new build) 36.1 25
PV ≤ 4kW (retrofit) 41.3 25
PV > 4- ≤ 10kW 36.1 25
PV > 10 - ≤ 50kW 31.4 25
PV > 50 - ≤150kW 19.0 25PV > 50 - ≤150kW 19.0 25
PV > 150 - ≤ 250kW 15.0 25
PV >250kW - ≤ 5MW 8.5 25
Wind ≤ 1.5kW 34.5 20
Wind > 1.5-15kW 26.7 20
Wind > 15kW-100kW 24.1 20
Wind > 100-500kW 18.8 20
Wind > 500kW-1.5MW 9.4 20
Wind > 1.5MW-5MW 4.5 20
Some important issues to consider
• Site orientation and shading
• System specification
• Financial assumptions on technical performance
• Pre-payment meters and metering
• Replacement of components over time • Replacement of components over time
• Output drop over time
• Fixing methods
• Resident engagement
• Financial Models and Insurance
Importance of solar data
Feed in Tariff for PV – Site and Shading
Site Selection:
• South facing
• Essential to consider over-shading to calculate generation yields
3D – Shading Analysis
Example: variation in output with pitch and orientation [CIBSE]
Shading Analysis
2D – Shading Analysis
Feed in Tariff for PV
Consultancy for PV
•Identifying the most suitable sites
•Accurate predictions of energy generation
•Modelling of shading
•Modelling Module/Inverter configurations•Modelling Module/Inverter configurations
•Support tender evaluation
•Confirm specifications
• Support investment case
The Renewable Heat Incentive
• Payments for renewable heat generation similar to FIT for
electricity
• An incentive based mechanism with intention of creating a
bigger market for renewable heat
• RHI will be funded from general Government spending,
not through the previously proposed RHI levy
• Due to go live from ‘Summer 2011’
• Two phases of implementation
Two-Phase Approach
• Phase 1: Non-Domestic Sector
» Targeting large energy users
» Businesses, industrial, public sector
» Communal systems included, e.g. sheltered
housing
• Phase 2: Domestic
» Long-term support aligned with Green Deal
(i.e. will support ‘whole house approach’)
» October 2012 for implementation
Confirmed original proposals
• Installations between 15 July 2009 & introduction of
scheme eligible for tariffs
• Long term support (adjusted for inflation) to compensate
for:– Capex and opex of renewable heating compared to a gas fossil fuel – Capex and opex of renewable heating compared to a gas fossil fuel
alternative
– Additional barrier and financial cost (assuming a 12% rate of return for a
reference installation, apart from solar thermal);
• Support for technologies classed as renewable
• MCS for installations <45kW
• Ofgem E-Serve will administer the scheme
New policy
• Value for money is key
• Two phase approach –second phase of the scheme from 2012
• Domestic included from 2012 –initial support through Renewable Heat
Premium Payments
• Fewer technologies supported in phase 1 to allow further evidence
gathering
• Two-tier tariff for biomass <1MW
• Funded from Government spending
HeatHeat
PumpPump
Natural temperature at >1 metre below surface is a constant +10 Natural temperature at >1 metre below surface is a constant +10 C.C.
Plenty of heat energy Plenty of heat energy –– but at too low a temperature but at too low a temperature
low grade heatlow grade heat useful heatuseful heat
Resource costs per MWh of key renewable
energy technologies
Source: (DECC Impact Assessment March 2011)
Phase 1 – Eligible technologies
• Ground and water source heat pumps (one tariff)
• Biomass
• Biogas combustion <200kW (incl gasification & pyrolysis)
• Biomethane injection
• Solar thermal <200kW
• Geothermal (GSHP tariff)
• Energy from municipal solid waste (adjusted biomass tariff)
• CHP (support on the basis of heat only technology)
Tariff levelsEligible technology Eligible size Tariff
(p/kWh)
Tariff
duration
(years)
Support
calculation
Solid biomass; municipal solid
waste (inc CHP)
< 200kWth7.6 (Tier 1)
1.9 (Tier 2)20
MeteringTier 1 applies annually to the
tier break,
Tier 2 above tier break
200-1,000 kWth4.7 (Tier 1)
1.9 (Tier 2)20
> 1,000kWth 2.6 20Metering
Tier break is
installed capacity x > 1,000kWth 2.6 20Metering
Ground source heat pumps;
water sourced heat pumps;
deep geothermal
< 100kWth 4.3 20Metering
> 100kWth 3 20Metering
Solar thermal < 200kWth 8.5 20Metering
Biomethane injection and
biogas combustion, except from
landfill gas
Biomethane all scales
Biogas combustion
< 200kWth
6.5 20Metering
installed capacity x
1,314 peak load
hours, i.e.
kWth x 1,314
RHI Biomass Example
• A 30kW biomass installation (e.g. a pellet boiler in a small school) generates 45 MWh (or 45,000 kWh) of heat in a particular year.
• Approximate capex = £15,000
– Its "Tier Break" can be determined by multiplying 30kW x 1,314h = 39,420 kWh. S It will receive:
• The Tier 1 tariff for first 39,420kWh,
i.e. 39,420kWh x 7.6p/kWh = £2,995.92
• The Tier 2 tariff for the remaining 5,580kWh,
i.e. 5,580kWh x 1.9p/kWh = £106.02
Total RHI payment = £3102 /yr
Administration
• Ofgem E-Serve– Manage applications
– Assess whether applications meet eligibility criteria
– Make incentive payments
– Ensure compliance with rules of scheme (may require inspection)
– Will produce guidance on the scheme
• DECC
• MCS Certifying bodies
Phase 1 – Eligible requirements
• All non-domestic or
single installations
heating multiple domestic
premises
• Metering of all
installations –heat has to installations –heat has to
be delivered through
water or steam
• Useful heat in buildings
(space, water or process)
• Sustainability reporting
for biomass above 1MW
• MCS products and
installers where
applicable up to 45kW
Phase 2
• Inclusion of domestic
• Automatic degression to control cost
• Consideration of further technologies
– Direct air heating (furnaces, kilns,
ovens etc)
– Air source heat pumps –key
technology
– Bioliquids
• Possible dedicated tariffs for
– CHP
– Geothermal
– Solar thermal and biogas
combustion >200kW
• Emissions limits for biomass boilers
Measuring the Heat
• Support paid on basis of multiplying the kWhth of metered
renewable heat by the relevant tariff
• Heat meter must meet the Class 2 requirements of EU
Measuring Instruments Directive (MID) 2004
• Heat Pumps: Must ensure metering does not count any
cooling element
• More details to follow from DECCS
What to look out for
• Check for RHI eligibility
• Make sure project management team
is in place
• Carry out options appraisal
• Select technology / ies
• Get quotes – from MCS installers for
45kW and below45kW and below
• Identify other eligible funding
• Check project can be delivered within
RHI review timetable (Apr ‘15)
• Complete Ofgem accreditation
99all of the above takes time!!!
Renewable Heat Incentive
Consultancy Offering:
• Identification of suitable buildings
• Assessment of revenues and running costs
• System specification
• Accurate predictions of energy generation and income• Accurate predictions of energy generation and income
• Modelling of supply and demand profiles
• Support tender evaluation
• Technical support for investment cases
• Impact on building users
Green Deal
• Pay as you save scheme
• Whole House Approach
• Companies e.g. British Gas, B&Q, M&S,
Tesco etc will pay for and install energy saving
measures
• No upfront cost
• A percent e.g. 80% of energy savings made
by the measures will be used to pay off the
cost of the measures (must within 25 years)
• Measures must provide greater energy
savings than the repayments over the 25 yr
period
What measures will be funded?
• Phase 1 - energy saving measures
– Solid Wall insulation,
– Double glazing
– Cavity wall
– Loft
• 2ND Phase - Micro renewables
– PV
– SHW
Who will implement Green Deal?
• Licensed Assessors – energy model the house (similar to
the EPC certificate) suggest measures
• Home owner signs up to scheme and pay back period
• Registered companies install measures to set standards
e.g. MCS etce.g. MCS etc
• The loan is against the house not the individual i.e. the
repayment is passed onto the new home owner
Green Deal – Seamless Customer Journey
Marketing DeliveryPre-Assessment Post -Assessment Monitoring
BRE
Green Deal Process
2) BRE markets
Green Deal to
consumers
through extensive
assessor network
1) Marketing of
Green Deal
5) Accredited Green
Deal Advisors drawn
from DEAs NDEAs
DECs & EHS
surveyors
Software: SAP,
RdSAP, BREEAM in
Use, Refurb Portal
Training by BRE
6) Product
Standard - PAS
Product
Certification
MCS
Green Book Live,
Redbook
SAP Appendix Q
7) Installation
MCS installers
Green Book Live
Red Book
Voluntary training for
installers & specifiers
16) BRE to develop
Operational Rating
software tool to
monitor future
performance –
service could be
provided by web-
based tool
4) Initial Survey 8) Green Deal
Finance
11) Green Deal
Retro-fit
Installation
12) Post installation
survey15) Maintain
relationship with
Technical feedback loop – uploads results into refurbishment portal
13) Accredited Green
Deal Advisors drawn
from DEAs NDEAs
DECs & EHS
surveyors
Software: SAP,
RdSAP, BREEAM in
Use, Refurb Portal
Training by BRE
Green Deal Provider
Via: web tool
(e.g.T-Zero),
network of
installers (SMEs)
9) Product
Customer Finance
Plan options for
products through
web-tool
Supply of products
(such as insulation
etc)
10) Installation
Installation of
products through
network of
installers (SMEs)
14) Results of post
installation assessment
used to enable
activation of finance
plan.
Assessment should
include an Operational
Rating
17) Operational Rating
software feeds back
energy performance
data to BRE and
Green Deal Provider
via Smart Meter
system
Assessment of
property to determine
Asset Rating (EPC).
This could include
Operational Rating.
Generation of “Green
Deal Report”
Finance Plan to be
generated for
consumer (must
meet “golden rule”)
Installation
Installation of
products
recommended in
initial assessment /
survey
Following installation a
second survey (EPC)
is undertaken to
produce post
installation Asset
Rating
customer
Monitoring of future
energy consumption
through a web-based
tool providing
feedback to Green
Deal provider
3) Opportunity for
provider and BRE
to work together
on dual branded
marketing
campaign
Loyalty feedback loop - driving repeat business through rewards system
Green Deal – a seamless Customer Journey
Assessment: Green Deal will require initial EPC for property in
order to initiate Process:
• Customer tracking through initial EPC report reference number
(RRN) enables customer to track progress of their Green Deal
throughout the process
EPC – report
reference
number
EHS Data Collection Pre 2008
Developing Scenarios for Future
Energy Use and Carbon Emissions
Market penetration of home energy efficiency measures
70%
80%
90%
100%
Perc
en
tag
e o
f p
ote
nti
al
Hot water tank insulation
Central heating
Double glazingDraught proofing
0%
10%
20%
30%
40%
50%
60%
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Year
Perc
en
tag
e o
f p
ote
nti
al
Condensing boilers
Cavity wall insulation
Loft
insulation
(any)
Step 1. Carbon Map
identify regional CO2 hotspots
Key points
• We will visually map dwelling
CO2 by Census Output Area
• This provides a clear
indication where poorly-indication where poorly-
performing stock is located
• Allows effort to be targeted
towards the most effective
locations
• Provides visually compelling
material aiding communication
with stakeholders
PV survey through dataS
Green Deal – a seamless Customer Journey
Installation: Second element of delivery phase is installation
of products supplied under Green Deal framework:
• Technical: Development of installation standard / code of
practice
• Training: Opportunity for BRE Training to provide
voluntary installer training – providing confidence to
consumerconsumer
• Certification: BRE Global operate an approved MCS
installer scheme, all MCS installers are listed on the
www.greenbooklive.com. This could be extended to cover
Green Deal Registered Installers
• Commercial opportunities: BRE Training - provision of
installer training, opportunities for Green Deal Provider –
revenue through installation service (partnership with
SMEs)
Green Deal – a seamless Customer Journey
Finance: Green Deal Framework will include need for finance package to
be extended to home/building owner to enable recommendations to be
implemented:
• Technical: BRE developed T-Zero which enables home owners to
review options for improvements, this could be extended to cover
Green Deal – indicating options for product selection. Capability on
cost-benefit and Green Deal finance modellingcost-benefit and Green Deal finance modelling
• Commercial opportunities: Further development of web-based tool
for consumers to model finance options – analysis of payback
Green Deal – a seamless Customer Journey
Post-Installation Assessment: Green Deal process will require
post installation EPC for property in order to confirm that
recommendations have been implemented:
• Technical: BRE developed software such as: SAP, RdSAP,
SBEM, BREEAM in Use and BREEAM Domestic
Refurbishment. Where issues occur BRE could help resolve
with advice.
• Training: BRE Training is able to provide top-up training for
DEAs and NDEAs enabling them to deliver Green Deal Advisor
services
• Certification: BRE Global well placed with 1,609 Accredited
Assessors who have lodged 762,822 EPCs, DECs and Home
Condition Reports
• Commercial opportunities: Training of Green Deal Advisors,
delivery of accreditation scheme (increased volume of EPCs)
Green Deal – a seamless Customer Journey
Maintaining the relationship with the customer – Monitoring:
• Green Deal process provides invaluable access to customers, which if
maintained could help to drive repeat business – monitoring energy
consumption will be key to developing future repeat business
• BRE to develop web based operational rating software which helps
the customer monitor post Green Deal energy consumption
• Energy data fed directly back to BRE and Green Deal Provider via
smart meter system installed during retro fit. Data used to inform and
refine software tools used for Green Deal Advice
Green Deal – a seamless Customer Journey
Maintaining the relationship with the customer – Feedback:
• Generate case study from pre and post assessment together with
monitored performance into NRC Refurbishment Portal
• Provide expanded database to be used by future customers
EPC – report
reference
number