Funding sources for renewables in commercial and domestic market

The Climate Change Act 2008 created a new approach to enable the UK to respond to the challenges of climate change, by not only setting ambitious, legally binding targets, but also strengthening the institutional framework with clear and regular accountability to Parliament.

The Act targets a 20% reduction in UK greenhouse emissions by 2020 and 34% by 2050. This has driven a need for the commercial and domestic building owners to install renewable heating technologies.

There is a range of government funding schemes that further support the 2008 Climate Change Act to further encourage companies and homeowners to adopt renewable technologies.

Commercial Sector:
Non Domestic RHI

The ndRHI is a Government environmental programme that provides financial incentives to increase the uptake of renewable heat for the non-domestic sector. It provides a subsidy, payable for 20 years, to eligible, non-domestic renewable heat generators and producers.

The purpose of the scheme is to provide a long-term financial incentive in order to significantly increase the proportion of heat generated from renewable sources. By driving change in a heat sector currently dominated by fossil fuel technologies, the ndRHI can help the UK meet EU targets to reduce carbon emissions and improve energy security.

In May 2014 the government updated the scheme up to include air-to-water heat pump installations. Commercial builds which use an air to water heat pump can claim 2.5p per kw/h on energy generated under the ndRHI.

Domestic Sector:
Domestic RHI: The domestic RHI is a government financial incentive designed to encourage people to switch to renewable heating systems that use naturally replenished energy to help the UK reduce its carbon emissions in line with the Climate Change Act 2008.

The scheme is open to homeowners and landlords who can install renewable heating technologies in their homes. They then receive quarterly payments for seven years for the amount of clean, green renewable heat their system produces.

Those who install air-to-water heat pumps will receive 7.3p per kw/h of energy generated with potential to earn between £2000 and £6000, depending on the size of the property and type of system.

Green Deal:
The Green Deal is a government-backed initiative that can help homeowners understand the energy-saving improvements that can be made to their homes. It can also help homeowners find companies to carry out the work, and gives them access to a number of options for paying for the improvements, including Green Deal finance.

The scheme, which requires an initial assessment, works by enabling homeowners to pay upfront for energy saving home improvements such as loft, cavity or solid wall insulation via a Green Deal loan. The loan is then paid back through savings made on energy bills.

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