Housebuilders

  • Reap the benefit of the latest green subsidy mechanisms

Property Landowners

  • Reap the benefit of the latest green subsidy mechanisms

Subsidy Regimes

  • Tend to be shortlived

  • Often poorly focused

  • Pulled at the whim of the politics of the day

  • Can make marginal projects viable

  • Orb Energy Solar & Heat Module makes commercial sense subsidy or not

Whilst subsidies to encourage the take-up of new technology are welcome - renewable energy included - they have their pitfalls.

Often they simply serve to bring providers into a market to exhaust the funds available before moving on to the next opportunity, this leads to low quality execution and below par deployment for the acquirer.

Regimes are also often quickly gone either through a limitation on funds, a poorly managed execution or political whim - and sometimes a combination of the three.

In truth subsidies tend to be a patchwork quilt, loosely stitched together with no overall coherent plan. 

 

That's not to say the monies on offer are not useful - well executed subsidies can make otherwise marginal projects viable - and they act as a reward to the committed investor.  

We, at Orb Energy, believe in the latter, subsidies should reward early adopters but not dictate or define the deployment.

With the impending demise of the RHI and its CHG replacement (see below) the headline subsidy rates are less than a sixth of what had previously been on offer. That should not put people off adopting renewable technology.

Our Solar & Heat Module qualifies for the current and future subsidy regimes which is welcome for property landowners, developers and investors alike however the real returns are the intrinsic value contained within the deployment of our module.

Orb Energy's building of dedicated, closed loop renewable energy networks delivers significant returns whatever the subsidy regime contemporarily running and easily survives commercial scrutiny where no subsidy exists at all.

Renewable Heat Incentive

 

  • Runs to March 2022

  • Still available for domestic GSHP

  • Up to £27,000 over 3 years

  • Made marginal projects viable

The Domestic Renewable Heat Incentive (RHI) is in its death throes with less than 12 months remaining until it closes.

The Non-Domestic RHI has already been shuttered.

The closure of RHI was poorly received as it had proved effective at bringing marginal renewable projects on-line where without the subsidy it is unlikely the householder, and third party provider would have found it commercially viable to proceed.

The generous terms of the RHI with a 7 year payment incentive across a range of renewable schemes some worth up to £27,000 are still available for domestic developments for Ground Source Heat Pump Schemes.

The loss of RHI may impact on marginal projects but is unlikely to be a major barrier to Orb Energy's clients.

 

We are confident however that there will be a new subsidy regime, potentially with a more concentrated focus to replace RHI in addition to or instead of the forthcoming Clean Heat Grant.

Clean Heat Grant

  • Runs March 2022-2024

  • GSHP Only

  • Up to £4,000 upfront

  • Unlikely to bring marginal projects into play

The Clean Heat Grant (CHG) is due to come on line from March 2022 ostensibly as a replacement for RHI.

CHG is entirely focused on GSHP schemes and only where a heat pump is not a viable proposition will it extend to the likes of biomass.

That is good news for Orb Energy clients as our Solar & Heat Module is GSHP driven and will render those eligible for a one off subsidy payment of £4,000.

Whilst this is significantly less than the equivalent RHI on offer currently, the financial benefits of moving to our Solar & Heat Module that we do not include this payment in our calculations.

CHG is proposed to run for two years from 2022 to 2024 and with this in mind we fully expect a complementary or replacement scheme to be implemented that reinvigorates marginal schemes whilst also providing incentives to larger projects.

Smart Export Guarantee

  • Payments for excess energy production

  • c3.5p/kWh

  • Paid annually

  • Compensatory rather than an incentive

The Smart Export Guarantee (SEG) is a payment all energy suppliers are required to offer customers who generate their own energy - through whatever means - and is a payment made on an annual basis for the amount of energy that has passed through their export meter onto the 'grid'.

SEG is not a centrally set figure and all suppliers have the flexibility to pay a rate they see fit however the payment is current at an average of 3.5p/kWh which whilst welcome is an extremely marginal incentive to set up a domestic system to purposely optimise excess production.

Far more worthwhile is producing and utilising 100% of the energy generated on site, on demand which is where Orb Energy's Solar & Heat Module comes into its own.

Citations

Domestic Renewable Heat Incentive (RHI), Gov.uk [Domestic Renewable Heat Incentive (RHI) - GOV.UK](https://www.gov.uk/domestic-renewable-heat-incentive)

BEIS (2021), Clean Heat Grant: further policy design proposals, Closed consultation, BEIS, [Clean Heat Grant: further policy design proposals - GOV.UK](https://www.gov.uk/government/consultations/clean-heat-grant-further-policy-design-proposals)

 

Ofgem About the Smart Export Guarantee (SEG), [About the Smart Export Guarantee (SEG) | Ofgem](https://www.ofgem.gov.uk/environmental-programmes/smart-export-guarantee-seg/about-smart-export-guarantee-seg)