UK feed-in tariffs: buy your hectare of woodland now

Today's UK government announcement on incentives for small scale renewables has three unexpected features: a) The payments for renewable heat, such as the home burning of wood to replace gas or rooftop solar hot water, are much higher than predicted.

b) The figures for wind have risen since the autumn consultation document. This means that well-located wind turbines of the 6-15kW size are likely to produce returns above 13% per year.

c) The figures for solar PV have been increased slightly, but do not offer returns as good as wind. Importantly, the government has also signalled that it will allow PV installed at any time over the next 28 months to capture the full feed-in tariff. Previously, the tariff declined for installations made after March 2011.

An earlier article on this topic which looks in more detail on the incentives to take up the new 'feed-in tariffs' is here.

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Domestic heat pumps: enthusiasm needs to be tempered

(The information in this article has been updated by a more optimistic article that looks at the before and after experience of a ASHP installation in Oxford, Please go to http://www.carboncommentary.com/2010/08/03/1632) Small heat pumps are increasingly used to provide space and water heating in UK homes. This trend is strongly encouraged by policy-makers and the government’s proposed Renewable Heat Incentive will add further financial support. The enthusiasm for this expensive technology should be moderated: for a home on the mains gas network, the savings in money will be small. Carbon benefits are probable but far from guaranteed. Moreover, air source heat pumps are unlikely to be able to heat many older homes effectively. Government, manufacturers, and installers need to be very much more cautious in encouraging the use of heat pumps and should use far more conservative payback assumptions. Heat pumps will eventually be a good investment for homeowners but probably not yet.

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Green jobs: time to look at the benefits of growing and using more wood

Government officials are searching for policies that will meet the twin aims of providing jobs and meeting the UK’s climate change targets. It is proving a difficult task. The easiest ways of reducing fossil fuel use will probably not create many new jobs in the UK. All large wind turbines are built abroad and although the construction work on a nuclear power station will generate a few thousand jobs, most of the key components will need to come from Europe and Japan. So where are the opportunities? I think two major areas stand out as excellent ways of generating jobs quickly without also dragging in expensive imports or sharply raising prices.

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Does an economic depression mean slower progress towards green objectives?

We didn’t make much progress reducing emissions when times were good. Will the looming depression makes things worse or better? The discussion of this issue, at least in the UK, tends to be superficial. The only question asked seems to be ‘will people buy less eco-bling when times are hard?’

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Yes, do lag your loft

For once, the government has got its climate change policies right. The idea of a windfall tax on energy suppliers has widespread support. One hundred or so Labour MPs have come out in favour. Caroline Lucas, the newly elected leader of the Greens, has advocated such a policy and many Conservatives express private approval. The trade unions were infuriated by Alistair Darling’s refusal to back the proposal. Rather than backing a windfall tax, it looks like he favours plans that oblige the utilities to improve the energy efficiency of customers’ homes.

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Eco housebuilding

After decades of foot-dragging, the UK construction industry has begun to see the importance of good insulation and higher environmental performance. Large housebuilders are beginning voluntarily to build their major developments to a better standard than required by building regulations.

Housebuilders also see the increasing commitment by government to increasing the mandatory standards for home insulation and other environmental characteristics. By 2016, all new homes will have to be ‘zero carbon’.

A report just released by estate agents Knight Frank examines whether buyers are prepared to pay the cost of the eco-improvements. The answer seems to be a cautious ‘yes’.

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The eco-homes at Bladon, near Oxford

New UK housing has insulation standards that do not come close to matching the best northern European levels. Individual homeowners and ethical investors have built single 'eco-homes' but a small new development in Bladon, Oxfordshire is among the first to be speculatively built by a mainstream housebuilder. The new houses are not 'zero-carbon' and do not use the Passiv Haus technologies pioneered for low-emissions housing in Germany. But they are a substantial improvement on most mass-produced homes. Will they make the builder more money? No, says the company, but the experience it has gained will enable it to build eco-homes at a more competitive price in the future. These nine houses each cost over £40,000 more than their draughty Persimmon equivalents. The builder expects the price premium to be slightly less.

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