How will the RHI affect the financial performance of solar thermal?

Now we have confirmation of the “Feed in tariff” payments, and we can work out the finances for solar PV and wind turbines. Perhaps we should look ahead at how the “Renewable Heat Incentive” will affect the finances?

Lets’s start with the most “popular” renewable-solar thermal (or solar for hot water)::

O.K. Let’s take an “average” sized system? 2 panels/24 tubes? Generating 1600kwh/annum (deemed?), and the home owner has GFCH paying £0.04/unit?

This is how it works:

Under the “proposed” figures, you will get paid £0.18 for each kwh you generate, in addition to any savings made? So:

1600 x £0.18= £288 (the annual payment) + 1600 x £0.04=£64 (the annual fuel saving) = £352.

The approximate cost of installation of this £4.5k. Giving a return on your investment of around 8%. This is tax free!! Not bad when compared to the bank where ( a tax payer), would have recieved less than £4!!!

Now here’s the clever bit! Until the end of March 2011 there’s a £400 central grant available (increasing the return to around 9%), and there are often additional local grants available -in some parts of Kent, there is a n additional £1500 available! (giving a whooping return of  around 16%! Not since Bernie Madhoff have we seen this level of return! But don’t worry this scheme has proper backing).

If you’re thinking of it, don’t wait, as these grants will not be available for ever!!!!!!!

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