The recent termination of the government-funded Low Carbon Buildings Programme clears the way for a broader, more financially sustainable approach in encouraging the installation of low and zero-carbon heating technologies in homes.
Since its introduction in April 2006, the LCBP has provided an estimated 20,000 grants for the capital and installation cost of microgeneration equipment for homeowners and not-for-profit organisations. As part of the coalition government’s £6bn cost-cutting programme, the Department of Energy and Climate Change announced the closure of the £34m scheme on 24 May.
On the surface, this appears to be bad news for the LZC heating sector. However, in the Queen’s Speech the government announced the introduction of new green loans for those who want to save energy. These offer a more financially sustainable option than the LCBP and will do more to grow investment in LZC technologies, especially for those on low incomes. Loans will be paid back through a pay-as-you-save scheme which, unlike the LCBP, does not require the homeowner to finance the LZC technology up front.
All new incentive schemes and tariffs will operate under the Microgeneration Certification Scheme framework, supported by tariffs on the utility bills.
This new link with the MCS will be an important change, effectively passing the ownership of being green from the eligible few under the LCBP to everyone.
Feed-in tariff rewards are based on providing a return on investment for displacing grid-generated electricity, whereas LCBP was simply a one-off payment to offset the capital cost of the installation. However, I am concerned about the proposed increase in fuel costs to cover the cost of the scheme and the impact that will have on fuel poverty.
The second yearly report from the Committee on Climate Change forecasts an annual four per cent reduction in carbon emissions up to 2022. As the economy improves, the committee highlights the need for a ‘step-change’ in the Government’s approach in key areas to achieve this target, including improvements in home energy efficiency. The Renewable Heat Incentive and boiler replacement schemes are two significant initiatives which could help deliver on this target.
It is imperative we reduce energy consumption, especially in existing homes. This will help to address concerns over the security of energy supply. That’s why it is important that the proposed RHI is introduced in 2011 and applies the principles of FiT to renewable heat. Supporting a range of renewable technologies, the RHI will reward users based on the type of heating method and the output of the appliance.
Simon Osborne is specification channel manager at the Baxi Group