Green Energy Incentives for UK Businesses

Green Energy Incentives for UK Businesses

Are you considering switching to solar energy for your business? The government offers a variety of incentives for UK businesses interested in switching from fossil fuel-based power to renewable sources of energy such as solar, wind and hydro.

From the Feed-in Tariff scheme, which provides reimbursement for excess energy generated from renewable sources, to the Non-domestic Renewable Heat Incentive, these programmes reduce the cost of switching to renewable energy.

Combined with the low price of solar energy equipment, the Feed-in Tariff scheme makes now a great time to switch to solar energy. Read on to learn more about the various incentives available for UK businesses interested in using green energy.

Feed-in Tariff Scheme

The Feed-in Tariff scheme is a tariff available for homeowners and businesses that generate their own electricity from renewable sources. There are two parts of the Feed-in Tariff: the generation tariff and the export tariff.

Feed-in Tariffs were introduced in 2010 as a way for homeowners and businesses to reduce the cost of switching to renewable energy. Today, Feed-in Tariffs allow many UK businesses to offset the cost of switching to renewable energy within a decade.

Commercial buildings with renewable energy systems such as solar panels or wind turbines that meets the Feed-in Tariff’s eligibility criteria can earn money – or lower the cost of the energy bills – by generating and exporting excess electricity.

The amount your business can earn through the Feed-in Tariff scheme depends on the total volume of energy it produces and its Energy Performance Rating.

In order to qualify for the Feed-in Tariff, your commercial property needs to have a level D Energy Performance Rating or better. The total installed capacity of its solar, wind or other non-renewable energy system must also not exceed 5 megawatts.

If your property generates energy using a micro-CHP system, its total capacity must be less than two kilowatts.

There are two ways for businesses to apply for accreditation for the Feed-in Tariff scheme:

  • Solar and wind energy systems that have a Declared Net Capacity of 50kW or less can apply for MCS-FIT accreditation
  • Solar and wind energy systems that have a Declared Net Capacity of 50kW up to 5MW can apply for ROO-FIT accreditation

The rates that your property can earn for generated and exported energy are index linked and guaranteed for 20 years. This means that you’ll earn a consistent rate for the energy you generate and export, even if energy prices change.

Non-domestic Renewable Heat Incentive

The Non-domestic Renewable Heat Incentive (RHI) is a government scheme aimed at UK-based businesses interested in switching to renewable heating systems.

The RHI provides financial incentives for businesses that switch to renewable heat systems such as biomass boilers or air/ground source heat pumps. Under the RHI, businesses can receive a subsidy for 20 years for generating renewable heat.

The Non-domestic RHI is aimed at industrial and commercial businesses, as well as public sector organisations. A similar scheme, the Domestic RHI, is available for UK homes and residential properties.

Several types of renewable heating are eligible for the RHI, including air and ground source heat pumps, biomass boilers, pellet stoves, and solar thermal panels.

You can learn more about the Non-Domestic Renewable Heat Incentive at the Ofgem website. In order to qualify for the RHI, your business and its renewable heat system must meet the eligibility criteria.