Mark McManus

Take advantage of green heat tariff

Landlords across the UK can beat the predicted soar in energy prices by taking advantage of the new Renewable Heat Incentive, writes Mark McManus, managing director of Wirral-based Stiebel Eltron UK.

The RHI is the government's £860m cashback scheme for green properties, which comes into play for commercial and public sector properties from 29 July 2011.

It is a golden opportunity for business owners, landlords and public sector organisations to get funding to go green and make tangible energy and cost savings. With inflation and interest rates rising, and fuel and energy prices potentially doubling over the next decade, now is the time to take advantage of the financial incentives on offer to switch to renewable energy sources.

I would suggest that the RHI is particularly relevant to property and business owners in areas without main gas supplies. Energy prices are at a premium at the moment and with oil so volatile there is no better time to join the green revolution, especially for areas outside the gas network which are vulnerable to rising oil prices.

The RHI really is perfect for off gas communities and we are expecting it to lead to a rapid increase in the number of buildings and businesses heated by wood fuel, biogas, solar thermal, heat pumps and waste-to energy technologies instead of oil-fired, imported gas or coal boiler.

Every property and building can be adapted with the right system and it is also important for landlords to respond to legislation on carbon reduction targets. An annual subsidy will be paid for each unit of heat produced, to whoever owns the renewable energy equipment – so this can be commercial tenants as well as property owners.

The Government is investing £860m into the RHI and this will be on offer to industrial, commercial and public sector installations from next month. This includes systems such as ground source heat pumps and solar thermal. Tariffs will be paid for 20 years with an estimated minimum Return on Investment of 12%.

Businesses could even combine this with solar panel systems to take advantage of the Feed in Tariff – the electricity generated by Solar PV can be used to run a renewable energy system and anything left over is then sold back to the grid.

The Government's Feed in Tariff – another positive financial incentive – gives a payment from your electricity provider, no matter whether you use it yourself or export it to the grid. This will last for at least 20 years.

There is a wealth of opportunity and the renewable energy industry can help to make going green both painless and profitable.

Since the introduction of the Climate Change Act 2008, government has increased the pressure to improve environmental building standards. There are a range of regulations that developers now have to meet on new build developments, and existing buildings are also under the microscope with minimum standards and financial penalties for those who do not comply.

So the message to landlords and businesses is to not delay – it could cost you in the long term and in today's harsh economic climate, every penny counts.

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