Everyday we read in the press about our need to reduce our CO2 emissions. Here are some facts about the building industry:
 

• 50% of all materials produced annually around the World are used in construction

• 45% of all energy is used in buildings

• 40% of all water is used in buildings

• 46% of all CO2  emissions (the main cause of global warming) comes from buildings

Measuring the environmental impact of materials can be divided into three areas:

• The energy required to extract the raw material from source, engineer the material into the final product and transportation to end user.

• The amount of toxins & CO2  emissions generated during extraction, manufacture, use & disposal

• Impact on resource depletion; potential for re-usability/recycling; biodegradability.

The amount of energy used by the product in its life cycle of production, use & disposal/reuse is known as embodied energy.

The government is encouraging us to increase the insulation in all buildings both commercial and residential. This will enable us to reduce our energy consumption, thus conserving valuable resources and cutting carbon emissions.

The Feed-in Tariff

When the Feed-in Tariff was introduced in April 2010, 41.3 pence per kWh was being offered by the government, to the consumer, via the electricity supply companies  for green electricity generated by renewables  - mainly photovoltaic panels. There was an announcement on  31st October 2011 that the subsidy is to be slashed by half.  The rise in energy prices has meant that the government got its sums wrong . Pay back time for installing pv panels has been halved making the government's offer of 41.3 pence per kWh too generous and unsustainable. We were warned that due to degression the feed-in tariff would probably be cut after three years but now we are told this is to be much sooner. In order to qualify for the current rate of feed-in tariff, installations need to be completed, certificated and working by 12th December 2011.  So  panels installed and registered after this date  will qualify for the new reduced rate of  'feed-in tariff. A government consultation ends on 23rd December 2011 so further changes are possible.
 
For  installations from 12 December, an £11,000 outlay could get back around £13,750 in payments over 25 years, compared with £27,500 for existing customers. The saving for new installations rises to £17,250 if you include energy savings.
 
This change may kill off the  free solar panels and free electricity deals being offered by the energy suppliers. That deal is to install the solar panels, the consumer benefits from the free electricity that the panels generate and the energy supplier claims the feed -in tariff. Already, Eon, British Gas and EvoEnergy have stopped taking calls from new applicants. However, HomeSun, Isis and A Shade Greener say they plan to continue.
 
If companies offering free solar installations do survive, the reduced payments for owners mean the free schemes will be an even more attractive option. The feed-in payments will rise with inflation (linked to RPI), plus you'll save more if energy prices jump significantly, which they could well do over 25 years.
 
A new energy efficiency requirement has also been announced. Anyone installing solar pv  after 1 April 2012 will have to produce an energy performance certificate to qualify for the full payments. The certificates grade homes on energy efficiency, and you’ll need to be grade C or above, which means having loft and cavity wall insulation. This will be another outlay if you don't already have them.  There may be free cash to help in the way of grants. Homes rated at lower grades will get less than half the standard payments.

In order to qualify for the Feed-in Tariff, you must use an installer and  equipment  that is certified by MCS - Micro generation Certification Service: For full listings visit: www.microgenerationcertification.org

Renewable Heat Incentive

The Renewable Heat Incentive has been put back until April 2012 to address some of the criticism which has been levied against it. Among the  controversy exist such questions as - does  it  reward the use of systems that burn more fossil fuels.?   AECB  complains that air-source heat pumps are to be subsidised although they are often associated with higher CO2 emissions than an A-rated gas boiler. There is no pre-condition that buildings or equipment be made energy efficient first, some technologies are described as renewable heat sources despite the fact that they rely on fossil fuels through electricity use and that biomass and biodiesel are promoted despite big doubts over their sustainability and whether they have lower or higher total carbon emissions than fossil fuels. The association's biggest problem with the initiative, however, is that payment on basis of consumption of energy is wrong.

AECB CEO Andrew Simmonds commented, "Trying to cut emissions and increase energy security by rewarding heat consumption is like trying to lose weight by eating ever more low-calorie biscuits. If you want to succeed the biscuits have to replace, not supplement, your over-rich diet, likewise the renewable heat has to replace, not simply add to, the fossil fuel the nation is using."

The technologies being included in the RHI are:

• Solar Thermal
• Air or Ground Source Heat Pumps
• Biomass Heat Systems

A typical residential Solar Thermal system, on a property with 3 to 5 occupants, will cut the water heating bill by around £55 to £85 per year. From October 2012, residential systems will also receive payments for every unit of heat they generate under the  Renewable Heat Incentive (RHI). The RHI means that households will receive around £250 per year, which when added to the fuel savings represents a return on investment of between 7 and 8% based on a typical household with 3 to 5 occupants. Solar Thermal panels generating 1,400 kWh @ 18p per kWh = £252. This would be the  return on investment based on a system cost of £4,000.

A grant of £300 has been available for domestic customers from 1st August 2011 for the installation of Solar thermal panels. This is known as the RHI Premium Payment  which is intended to bridge the gap until the full Renewable Heat Incentive scheme is launched in October 2012. Under the RHI Premium Payment Scheme £950 can be claimed for Biomass heating systems, £850 for Air source heat pumps and £1250 for ground source heat pumps. 

It appears that despite the claim in the introduction of the DECC's consultation document that the initiative's goals are to put the UK, "firmly on track towards an 80% reduction in carbon emissions by 2050," the point of the RHI seems to be more about increasing the range of "renewable" technologies used and their costs rather than any reduction in environmental impact. The government does deserve some credit for proposing this legislation, however. The first of its kind in the world, the tariffs seek to bridge the financial gap between the cost of conventional and renewable heat systems at all scales plus a rate of return of 12% on the additional cost of renewables, with 6% for solar thermal. This will increase the take-up of these technologies drastically, reducing carbon emissions and our reliance on foreign fuels. Dropping the whole idea would be counter-productive. Some of the rules must be tightened, particularly surrounding who will be eligible and the areas in which it differs from feed-in tariffs. On the whole, the scheme can be a good one and this is why such consultations exist.

The government will now have its chance to review and react to the consultation ahead of the proposed RHI starting date next April. We can only hope they take some of this criticism on board and produce something that will work well from next year and not become a political "hot" potato.