The final awards ceremony was held for SPI clients from North Ayrshire recently to reward them for their participation and hard work. Once again these businesses...
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This section provides information on the funding streams available to SMEs in Scotland for resource efficiency measures – from training of staff in new low carbon skills to thermal improvement of your premises and renewables. This information is correct as of publication on 18th July 2014.
The Feed In Tariff (FIT) and Renewable Heat Incentive (RHI) are the financial support mechanisms for electricity generating and heat generating renewable technologies respectively provided by the UK government. The aim is to encourage uptake of renewable technologies by householders, businesses and organisations to pave the way towards energy independence and a low carbon society.
FIT and RHI are often cited as offering better returns on investment than pensions and their ability to make savings and even generate income should not be overlooked. Cutting carbon emissions, future proofing against energy price shocks and moving towards energy independence however should be the primary motivations for uptake.
- Technologies Supported
- Electricity Bill Savings
- Run Time
- Case Study – Alan Young Engineering
- Technologies Supported
- Energy Bill Savings
- Run Time
- RHI Calculations
- Case Study – Senwick House
Feed in Tariff (FIT)
Solar Photovoltaics (PV) Hydro
Wind Anaerobic Digestion
Micro Combined Heat and Power
Two types of FITs exist to support your electricity generating renewable technology.
This is a rate per kilowatt hour (kWh) you will receive for electricity generated by your technology. You receive this payment even if you don’t use all of the electricity you generate, ie: if you export some to the grid.
3 Tiered Tariff for Solar PV
From the tables on the Ofgem site you will notice that the solar PV tariff comes in three tiers, a higher rate, a middle and a lower rate.
You will receive the higher rate tariff if your building has an EPC (Energy Performance Certificate) rating of D or more. This proves the building is relatively energy efficient.
The middle rate is for buildings with an EPC rating less than D but where evidence can be given that the energy performance cannot be improved within reasonable means, for example with a listed building.
The lower rate tariff will be given for buildings with an EPC rating of less than D where no evidence is provided that the energy performance cannot be improved using reasonable means.
This is a rate per kWh you will receive for any electricity you generate from your technology which you do not use so therefore which can be exported back to the grid. For ease this is often calculated on a ‘deemed’ basis where it is estimated 50% is used on site and 50% is exported.
Current FIT rates are given in the tables below.
All Other Technologies
More information can be found at link to Ofgem site.
Electricity Bill Savings
In addition you will make savings on your electricity bill which in many cases will be significant. It is in your interests to try and use as much of the electricity you generate as possible, as the rate you pay per kwh electricity from a utility company will be much higher than the rate you will achieve through export.
Technologies exist now which allow you to save the electricity you generate if you cannot use it at the time of generation, if you work during the day when the generating capacity is greatest for instance. Examples of this type of device are the EMMA and ImmerSun. They convert unused electricity into heat for hot water which can be used for central heating or hot water from the tap. Based on a solar PV system it is estimated that this type of device can treble the amount of own generated electricity you can use thus trebling the return on investment (shortening payback from 12 to 4 years, for example). Tracking devices also exist for solar PV systems which can significantly improve their output.
FIT rates being given in kWh of electricity generated/exported can be misleading and lead people to overlook the huge savings and even income generation which can be achieved. We strongly recommend you try an online calculator such as the ones given below one to estimate savings/income generation to give you a feel for how financially worthwhile an investment in renewables is.
Renewable Heat Incentive (RHI)
The Renewable Heat Incentive (RHI) is the financial support mechanism for heat generating renewable technologies in the UK. RHI is split into two categories, non-domestic (or ‘commercial’) and domestic. Only commercial or non domestic will be discussed in this section. Information on domestic RHI can be found on the Ofgem website.
Technologies supported by non domestic RHI are
Biomass Boilers and Larger MCS Accredited Wood Burning Stoves
Ground, Water Source or Deep Geothermal Heat Pumps
Air to Water Source Heat Pumps
Added in May 2014 this is the most recent technology to be supported by RHI. This works by linking an air source heat pump to an existing or newly installed set of radiators. Because the heat produced is of a lower grade it works best with larger radiators and under floor heating.
Air to air source heat pumps are a less efficient way of producing heat than air to water so are at present not funded through RHI.
For example, solar thermal panels
Biomethane and Biogas Combustion
Unlike FIT, RHI operates on a generation tariff basis only.
2 Tiered Tariff for Biomass
You will notice that the biomass tariff comes in two tiers, tier 1 and tier 2.
Tier 1, the higher rate is paid to the first 1314 hours of heat produced per year. This equates to 164 days or months using heating for 8 hours per day or 8 ‘working’ months with 20 working days in each.
Tier 2, the lower rate, is paid for the kWh heat produced over and above 1314 hours in a year. This may only be paid in a highly used premises open more than 8 hours per day 7 days per week.
Current RHI rates are given in the tables below.
More information can be found at the Ofgem website.
Heating/Hot Water Bill Savings
RHI rates being given in kWh of heat generated can be misleading and lead people to overlook the huge savings and even income generation which can be achieved. We strongly recommend you estimate how much heat you would use (based on your business’s present heating bill) and calculate up the RHI payments over the 20 year period to get a flavour for payback periods and returns on investment. Remember to include:
- an increase year on year for inflation
- savings on your conventional heating (adding inflation year on year too)
If you would like assistance with this please email us at firstname.lastname@example.org or call 01387 702347.
£10 – £20m is being made available by the UK Government to help organisations fund measures which will reduced their electricity demand at peak times. The Electricity Demand Reduction (EDR) Pilot covers measures such as installation of LED lighting and new energy efficient air conditioning. Projects are granted funding via an auction where organisations bid in kWh savings their projects will achieve. The funding is transferred once the measure has been implemented and the savings demonstrated.
Click here to find out more.
The Enhanced Capital Allowance (ECA) scheme has been developed by the UK government to encourage businesses to invest in energy efficient plant and machinery which may otherwise be too expensive. Through the scheme businesses can claim 100% of the first year’s capital allowance against the taxable profits of the period on investments which meet the scheme criteria.
Eligible technologies are included on the Energy Technology List which is updated annually. Technologies can be added or removed from the list as criteria change; applicants can apply for tax relief if their technology was on the list at the time of purchase. If a technology is unlisted a case can be made by your supplier to prove that the technology meets the energy saving criteria and tax relief can be accessed.
The main types of plant and machinery which are covered under the scheme are boilers, water efficient appliances and fittings, combined heat & power systems, compressed air equipment, heat pumps, heating and ventilation equipment, high speed hand driers, lighting, motors & drives, pipework insulation, radiant heaters, refrigeration equipment and solar thermal systems.
The scheme is administered by the Department of Energy and Climate Change (DECC) in conjunction with the HRMC. Further information is available from the DECC website.
a. Regional Loan Schemes
A variety of loan schemes exist throughout Scotland which can fund a range of ‘resource efficiency’ measures includes LED lighting, insulation, boiler upgrades to renewables or environmentally sustainable working processes and practices.
i West of Scotland Loan Fund
This loan scheme is available to existing SMEs and start-ups in the west of Scotland. It has recently been widened to cover resource efficiency measures including everything from LED lighting and boiler upgrades to renewables. The interest rate is fixed and is currently 5% per annum. Loans of up to £100,000 will be considered with usual payback period of seven years. For more information please visit www.wslf.co.uk
ii East of Scotland Investment Fund.
Open to SMEs in the East of Scotland, this scheme covers resource efficiency measures under ‘Working Capital’; anything which will enhance the growth and sustainability of the business. It requires at least 50% match funding by the private sector. Interest rates are fixed and are currently 6% per annum with a maximum repayment period of five years. Further information can be found at www.eastscotinvest.co.uk
iii Highland Opportunity Fund.
This fund provides a variety low-interest loans to businesses in the Highlands including those for community and youth enterprises. Resource efficiency measures may be covered under working capital, equipment costs or refurbishment of premises. Further details can be found at www.highland-opportunity.com
b. National Loan Schemes
i Scottish Loan Fund
This loan fund, which is funded in part by the Scottish Government is larger than its regional counterparts providing finance of between £250,000 and £5m. It is attractive to SMEs because of its flexibility, for example offering payback periods of between 3 and 7 years. The fund is administered on a case by case basis but larger capital expenditure around sustainability and resource efficiency may be supported, for example the purchase of a large renewable heating system.
For further information please visit www.mavencp.com/scottish-loan-fund.aspx
ii Re-Energise Finance Ltd’s Smart Energy Finance Funded by Green Investment Bank
This fund has recently been replenished by the Green Investment Bank and S1 Capital R&S1 and offers loans typically of £25,000 to £400,000 for any energy efficiency project. It covers everything from LED lighting right up to large scale renewables. The fund operates on a hire purchase basis and offers competitive rates with a typical payback period of 3 to 7 years.
More information can be found at http://reenergisefinance.com/
iii Low Carbon Transport Loan
This Transport Scotland funded loan provides funding to businesses and organisations, private and public sector across Scotland who wish to lower the carbon footprint of their transport and travel. Funded measures include:
- Electric and plugged-in hybrid vehicles
- Vehicle efficiency devices
- Video and teleconference facilities
- Cycle facilities, including bicycles, storage racks and lockers
- Fleet management software
For more details please visit www.energysavingtrust.org.uk/scotland/Organisations/Transport/Interest-free-low-carbon-transport-loan
iv Resource Efficient Scotland SME Loan
Funded by the Scottish Government, this scheme aims to support businesses that are looking to reduce costs through improving resource efficiency. It is open to Scottish SMEs, private sector landlords, not-for-profit organisations and charities.
Loans are interest free unless used to finance any renewable technology where the applicant intends to claim the Feed In Tariff (FIT) or Renewable Heat Incentive (RHI). Here the interest rate is 5%.
The loan cannot be used for opportunities where Green Deal finance is available but it can supplement partial Green Deal finance.
Applications must be supported by a carbon foot print and accompanying action plan to drive it down. This can be provided by us in Sustainable Process Improvement at the Crichton Carbon Centre completely for free. Please call 01387 702347 or email us at email@example.com
For more information please visit www.energysavingtrust.org.uk/scotland/Organisations/Innovation/In-depth-energy-advice/Small-business-loans
v District Heating Loan Scheme
Again funded by the Scottish Government and administered by the Energy Saving Trust this scheme provides finance for low carbon and renewable technologies for organisations to develop district heating projects to benefit local communities. It delivers low interest loans (3.5% on low risk projects) on values up to £400,000 with repayment periods of up to 10 years. Those eligible to apply include SMEs, Energy Service Companies (ESCOs), registered social landlords and local authorities.
For more information please see http://www.energysavingtrust.org.uk/scotland/Take-action/Get-business-funding/District-heating-loan-fund2
Funding for SME in Scotland- Resource Efficient Scotland SME Implementation Fund
This scheme offers grants up to £20,000 in order for companies to:
- Employ short-term skilled employees to assist on a specific project with emphasis on the use of raw materials, waste minimisation, energy use and/or water use
For full details of the scheme, visit http://www.resourceefficientscotland.com/smeimplementationfind
Support for Aberdeenshire Business – Sustainable Business Grants
This scheme provides grants of up to £7,500, or 50% of project costs (whichever is lower) to:
- Install environmentally sustainable business processes
- Encourage good practice in renewable energy, energy or waste management, efficient use of resources, recycling or establishing sustainable working practices.
More information can be found at www.aberdeenshire.gov.uk/support/finance/sab.asp#loans
Low Carbon Skills Fund
The Low Carbon Skills Fund is designed to help businesses develop the skills they need to exploit the transition to a low-carbon economy. It gives Scottish businesses with up to 250 employees the opportunity to apply for up to £12,500 towards employee training costs. The scheme provides funding for up to 25 episodes of training and 50% of training costs, up to a maximum of £500 per episode.
Eligible training includes:
- Renewable energy, low carbon technologies and micro-generation
- Energy efficiency, environmental and clean technologies
- Waste management and re-use
- Reducing carbon in supply and energy management.
For further information please see: www.ourskillsforce.co.uk/develop/low-carbon-skills-fund
Resource Efficient Scotland SME Implementation Fund
This fund provides up to £20,000 for short term employment or redeployment of staff to implement resource efficiency measures. The closing date for initial applications is Friday 31st October 2014. Please access the Zero Waste Scotland website for more details and how to apply.
Businesses in Dumfries and Galloway and surrounding areas are invited to attend an evening of resource efficiency advice and VIBES sustainable business awards information...
A second awards ceremony has been held for SPI clients from West Dunbartonshire recently to reward them for their efforts. Once again these businesses have gone...
A host of SPI clients from Dumfries and Galloway have been rewarded for their resource efficiency efforts at a recent end of SPI awards bash. These businesses...
SPI clients Galloway Lodge, Senwick House and the Urr Valley House Hotel have received recognition in the Galloway Gazette for their moves to become more sustainable....