Payback period for energy saving equipment significantly shortened with new Government incentives

(22/04/2010)

The Feed In Tariff (FIT) started at the beginning of April 2010 for renewable electricity generating equipment and the Renewable Heat Incentive (RHI) will be introduced in April 2011 for renewable heat generating equipment.

The Government is committed to meeting very ambitious targets in reducing the amount of CO2 we emit from our homes. To reach these targets and encourage us all to purchase renewable technologies, these two new incentives will offer a regular annual income to help cover the additional cost of installing these new technologies, by paying an incentive for every kWh of energy produced.

Mitsubishi Electric is using the CIH Harrogate Exhibition (22 – 24 June) to highlight the dramatic shortening of payback periods for energy saving equipment as a result of these two new Government incentives. Mitsubishi Electric will be exhibiting both its Ecodan® air source heat pump system and its advanced Photovoltaic power generating equipment on Stand 105 in Hall B at the Show.

“These point the way to a major growth in power generation and renewable heating within our housing stock and this will lead to a major increase in the use of air source heat pumps and photovoltaic systems,” explains John Kellett, General Manager of the company’s Heating Systems Division

“One of the key issues for housing associations is being able to ensure that tenants are warm at minimal cost, with heating supplied by a system that will work reliably and with as little maintenance as possible,” adds Kellett. “That’s where air source heat pumps and photovoltaics steal the lead over many other technologies because they can both be virtually maintenance-free.”

Mitsubishi Electric has produced two detailed comparisons that show how a typical semi-detached, cavity-wall insulated property fitted with a photovoltaic array and an Ecodan air source heat pump generates almost 50 per cent more income over its lifetime period than a solar thermal / air source heat pump system.

Both have similar installation costs, but the Feed In Tariff means that the PV is able to generate more income and shorten the payback period. In the second example – on the same property – a larger PV array is specified, meaning an increase in capital outlay of about £5,000. However, the increased income from the FIT scheme means that the PV / Ecodan system will generate an annual income of £1,239 compared to the £523 from a solar thermal / Ecodan system. This helps drastically shorten the payback period whilst helping the PV/Ecodan system earn a lifetime income of £22,113 after capital and running costs have been deducted.

“We are already specifying several combined PV and Ecodan systems as housing associations realise the long-term implications for this technology and we expect this demand to grow very quickly,” ended Kellett.

Related categories:  Energy Conservation   Heat pumps   Solar heating