The Green Deal

After dissing the government in my last blog, I am going to commend them on a far-sighted policy which will come into play in October-it’s called the ‘Green Deal’.

One of the great things about micro-generational renewable energy is that it will save you an absolute packet. It is like paying your next ten year’s energy bills up front with an 80% discount. There is one major drawback though, and that’s the initial cost. We all know that it will save you loads in the long-term but the fact is that its only people with some quite significant savings in the bank who can afford to do it.

This is where the ‘Green Deal’ steps in. The ‘Green Deal’ is a finance mechanism whereby money is made available to you, the customer to pay for your renewable installation. This could be solar panels, a heat pump, a biomass boiler or a whole host of other things. The money comes through the energy company that you use and it goes straight to the installer.

Now here’s the clever bit. It is calculated how much your installation will cut your energy bills every quarter. This amount is then added on to your energy bill until the installation has paid for itself. So let’s say you get a heat pump at £12,000 initial outlay but it saves you £500 a quarter. Your energy bill goes down £500 a quarter and then the repayment is added on to your bill-£500 a quarter. There is effectively no difference, except after 6 years your energy bill goes down £500 a quarter and there’s no more money to be paid back! Brilliant!

What’s more, you’ve got a swanky heat pump giving you clean energy which has got a good 20 years effective life in it. If you decide to move on then the pay-back just passes on to the next owner of the home and they will continue to reap the benefit of the heat pump.

It’s a great way to make renewable energy affordable to the majority of the population. Keep your eyes peeled for developments on this one. As an MCS accredited installer, you can be assured that BEC will be straight in there once accreditation becomes available and will be ready to provide for your renewable energy needs.

Watch this space…

Feed-in-Tariff mayhem

As a new renewable energy systems installation business, one of the hard things to deal with in the last few months has been the government’s tinkering with the Feed-in-Tariff (FiT).

If, like most people, you don’t really know what the FiT is, but you can vaguely remember hearing a bit of controversy about it in the news, then you’re in the majority. Basically, the FiT is a system to get micro-generation technologies, particularly solar photovoltaic panels, up and running as an industry. The government force the energy companies to pay a tariff to their customers who are generating electricity-this is the case whether the electricity is being consumed by the customer or fed onto the national grid. In fact, the FiT rate is slightly higher if its fed onto the grid-it really should be called the generation tariff.

Anyway, up to last year the FiT was 43.3p/kWhour. This may not mean a lot to you but a kWhour (kilowatt hour) is the standard unit of electricity consumption. You will buy a kWhour from your energy provider for about 12p. You can see then that 43.3p is incredibly generous-and not long-term sustainable.

Everybody knew that and the planned programme was to reduce the rate on 1st April 2012, to probably around half-still a generous rate. The whole solar pv industry was set up for that and prepared. Then, at the start of November last year, came the bombshell that the government would in fact reduce the rate to 21p/kWhour on 12th December and not the 1st April. This, bizarrely, while carrying out a consultancy which would last until 24th December!

At this stage, there was panic amongst  solar installers to get hold of the required equipment. Pv panels and inverters particularly, became hot property across the land. As you can imagine, the bigger installers flexed their financial muscle and stocked up their warehouses leaving very little for the little guys like me who cannot afford to purchase big stocks in advance. I had my first job starting on 15th November on which I was to be audited. I must have made hundreds of phone calls to suppliers and other installers across Scotland and beyond to see if anything could be spared. Eventually I managed to cobble everything together, the installation went well and I passed my audit. Phew!

As you may know, the change in tariff rate was challenged by Friends of the Earth and it is currently being dragged through the Supreme Court. The thing which is frustrating isn’t the drop in tariff rate-we all knew that was going to happen and that it had to happen. It is the fact that the government does not seem to realise that businesses need to be able to plan to a reliable timetable. We need to resource labour and supplied. This is true for me as a small business so you can multiply that by a thousand for a business employing lots of people.

The other thing which is annoying is that it undermines the impression of the government’s commitment to micro-generation renewable energy. The FiT is promised for 25 years, but people understandably think, “well, if they can just change it like that, how do I know that in ten years they won’t just pull the plug altogether?” Chopping and changing an agreed timetable undermines confidence.

Just so you know, solar pv is still a great investment and will continue to be for many years to come. Don’t listen to the doom-mongers! PV is here to stay!

Better Energy Blog

This is a blog about all things connected to the energy industry. This is a subject which stirs up more hot air than your average cooling tower, and its not hard to see why. Energy concerns all of us. You are only reading this because you are able to connect to an electrical supply, whether you’re on a PC, laptop or mobile phone. Energy in fact drives our society. From getting to work, to the dinner on your table, to your morning shower, to snuggling up in bed, the energy industry affects just about everything that we do.

It gets bigger though. While we, the little people, plod along happily, using energy without giving too much thought to where it comes from or where it goes, the great tectonic plates of modern human history have also been diverted in the energy industry’s wake:

  • The problems in the Middle East can more or less be dated back to the first commercial extraction of oil in Persia in 1901.
  • Large swathes of Great Britain are home to once prosperous towns, now deserted because the Thatcher government thought the coal miners had too much power.
  • Russia can veto any UN resolution they like and no-one will protest in case they turn off the gas again.
  • There’s a great big hole in the ozone layer caused by industrial gases that may well turn out to be the single biggest cause of human mass movement in the 21st Century.

I think you get what I am saying-the energy industry has had an impact.

So what’s this blog about then? Well,  a lot of people have a lot to say about energy, and I want to throw my tuppence in there too. However, I like to think that I may come at it from a slightly different angle than your average commentator. I am an installer-I work in homes and on site getting my hands dirty installing energy systems for everyday use. Think of this as a bit of a coal face commentary of what’s happening in the energy industry and how its affecting us on the ground.

I hope you’ll be back next week!