LCBP Grants end in favour of Feed In Tariffs & Renewable Heat Incentive
On February 1st 2010 Energy and Climate Change Secretary Ed Milliband announced the feed-in tariff (FITs) levels and also published a blueprint for a similar scheme to be introduced in April 2011 to incentivise low carbon heating technologies. The renewable heat incentive (RHI) will be a world first.
On February 3rd the DECC stopped all new applications for LCBP Installation grants for electricity microgeneration (they had been expected to continue until the FIT started)
On May 24th 2001 the DECC closed off the LCBP grant scheme to new applicants. Exisiting grant applications will still be paid in full.
Full details of the announced Feed In Tariffs and Renewable Heat Incentive are set out below
Feed In Tariff
The tariff levels for the electricity financial incentives (pence), calculated to offer between 5-8% return on initial investment in the technology are shown in the table below
Tariff levels for electricity financial incentives
| Technology | Scale | Tariff level for new installations in period (p/kWh) [NB tariffs will be inflated annually] | Tariff lifetime (years) | ||
| Year 1: 1.04.10- 31.03.11 | Year 2: 1.04.11- 31.02.12 | Year 3: 1.04.12- 31.03.12 | |||
|---|---|---|---|---|---|
| Anaerobic digestion | ≤500kW | 11.5 | 11.5 | 11.5 | 20 |
| Anaerobic digestion | >500kW | 9.0 | 9.0 | 9.0 | 20 |
| Hydro | ≤15 kW | 19.9 | 19.9 | 19.9 | 20 |
| Hydro | >15 - 100kW | 17.8 | 17.8 | 17.8 | 20 |
| Hydro | >100kW - 2MW | 11.0 | 11.0 | 11.0 | 20 |
| Hydro | >2MW - 5MW | 4.5 | 4.5 | 4.5 | 20 |
| MicroCHP pilot | ≤2 kW | 10 | 10 | 10 | 10 |
| PV | ≤4 kW (new build) | 36.1 | 36.1 | 33.0 | 25 |
| PV | ≤4 kW (retrofit) | 41.3 | 41.3 | 37.8 | 25 |
| PV | >4-10kW | 36.1 | 36.1 | 33.0 | 25 |
| PV | >10 - 100kW | 31.4 | 31.4 | 28.7 | 25 |
| PV | >100kW - 5MW | 29.3 | 29.3 | 26.8 | 25 |
| PV | Standalone system | 29.3 | 29.3 | 26.8 | 25 |
| Wind | ≤1.5kW | 34.5 | 34.5 | 32.6 | 20 |
| Wind | >1.5 - 15kW | 26.7 | 26.7 | 25.5 | 20 |
| Wind | >15 - 100kW | 24.1 | 24.1 | 23.0 | 20 |
| Wind | >100 - 500kW | 18.8 | 18.8 | 18.8 | 20 |
| Wind | >500kW - 1.5MW | 9.4 | 9.4 | 9.4 | 20 |
| Wind | >1.5MW - 5MW | 4.5 | 4.5 | 4.5 | 20 |
| Existing microgenerators transferred from the RO | 9.0 | 9.0 | 9.0 | to 2027 | |
The FIT's are designed to take into account the anticipated reduction in cost of installation of certain technologies, which is why there are lower levels of payment for installations made in year 3 (and they will get progressively lower in further years) This is known as degression and is the method being used to keep the FIT at a return of 5-8% on investment.
Renewable Heat Incentive
The proposed tariff levels are shown in the table below. The levels have been calculated to give a return on investment of 12% (except solar thermal, which is lower), so are generally more generous than the Feed-in Tariffs.
Tariff levels for Renewable Heat Incentives
| Technology | Scale | Tariffs (pence/kWh) | Tariff lifetime (years) |
| Small installations | |||
|---|---|---|---|
| Solid biomass | Up to 45kW | 9 | 15 |
| Biodiesel | Up to 45kW | 6.5 | 15 |
| Biogas on-site combustion | Up to 45kW | 5.5 | 10 |
| Ground source heat pumps | Up to 45kW | 7 | 23 |
| Air source heat pumps | Up to 45kW | 7.5 | 18 |
| Solar thermal | Up to 20kW | 18 | 20 |
| Medium installations | |||
| Solid biomass | 45kW-500kW | 6.5 | 15 |
| Biogas on-soite combustion | 45kW-200kW | 5.5 | 10 |
| Ground source heat pumps | 45kW-350kW | 5.5 | 20 |
| Air source heat pumps | 45kW-350kW | 2 | 20 |
| Solar thermal | 20kW-100kW | 17 | 20 |
Unlike Electricity production where it is easy to determine the amount of energy produced from a meter reading, it is not easy to meter the production of heat energy. It is only proposed to meter the heat output of large systems. For household-scale and small systems the proposal is to calculate (deem) what that installation should produce to heat a well insulated building and to pay the tariff on that basis. That should encourage beneficiaries to adopt good energy efficiency standards too.
Full details of the FIT and RHI can be found on the DECC website