For commercial building owners the Renewable Heat Incentive offers a compelling financial case for the use of heat pump systems. The payments from the RHI could also be used to help finance a project using a loan. There are other financial considerations depending on the type of building being looked at.
Homeowners. The Government is intending to extend the RHI scheme in 2012 to include domestic installations. We expect further details of this early 2012. There will be a one-off grant scheme introduced later this year that homeowners will be able to take advantage of. This is called the Renewable Heat Premium scheme. More details can be found on the Department of Energy and Climate Change website.
Public sector and commercial buildings. It may be possible to fund part or all of the renewable energy installation using an asset finance model similar to that commonly used for the purchase of IT systems. Many financial institutions will consider this type of approach with the RHI payments seen as a form of security.
In addition there are special rates of VAT that apply to renewable energy installations and for commercial operations it may be possible to use the Enhanced Capital Allowance scheme to save tax on a renewable energy system.
As part of the Myriad CEG group we can advise on funding options for projects that include multiple renewable technologies like PV, biomass and wind as well as heat pumps.