The Feed in Tariff is a government initiated scheme designed to help stimulate the market in the UK for producing zero carbon, renewable energy. Under the scheme your energy company is required to pay you a premium rate for the electricity that you generate from your system. You do not need to sell the electricity back to the grid. You are paid for the energy as you
generate it and use it in your own house. So not only do you get the benefit of money in, you do not have to buy electricity either. Different technologies carry different rates and are guaranteed for either 20 or 25 years again depending on the specific technology. All rates are index linked and income tax-free ensuring that your returns are real returns and are not affected by inflation as savings in the bank often are.
The green deal will allow homeowners to improve the energy efficiency of their home without needing any up front capital. The qualifying criteria is that the savings generated by the installation in the long run exceed its initial capital cost. This qualification will be determined by an independent Green Deal Advisor.
The need for this qualification is due to the fact the the capital cost of the equipment is covered by a Green Deal Provider. The Green Deal Provider is then expecting to get their money back from your energy company as the result of the savings you have made.
What makes the green deal different from an ordinary loan is that if you move out of your house before the cost of the installation has been fully repaid, it will be the responsibility of the new occupant to pay the energy bills and thus repay the Green Deal loan.
The renewable heat incentive is a tariff payment given to homeowners who generate their own renewable heat, such as from a solar thermal system. The energy generated by the system is
metered and the homeowner sends a quarterly reading to their energy supplier who will pay them the tariff.
The renewable heat incentive is due for release in October 2012. Installations put in between now and then will still qualify to receive the renewable heat incentive after it is released. However the final list of qualifying technologies and tariff levels is to be decided. What is known for sure is that any technologies installed and the installer that fits it must hold MCS (micro generation certification scheme) certification.
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