Generate income from your own renewable energy

Generating and using renewable energy is one way that businesses can potentially save money. The rising cost of fossil fuels and the financial incentives offered by the government are making it increasingly cost-effective for businesses to generate and use renewable energy.

On-site generation options
Could you make your business premises into a small scale energy generator by installing one of a range of power generation options?

• Wind turbines – in the UK, wind energy is the most common renewable energy technology and it’s also one of the most financially viable options. You can install free standing or roof mounted turbines. Good for: exposed locations. Watch out for: planning restrictions and intermittent supply.
• Solar systems – you could install a photovoltaic system to convert sunlight into electrical power or you could use a hot water system to absorb heat energy. Both types of system are usually mounted on roofs. Good for: south facing roofs and new buildings. Watch out for: costs of installation on old or existing buildings and check planning restrictions.
• Hydroelectric plant – hydroelectric power schemes convert the energy of running water into power. They can be installed on a small scale for industrial or commercial use with a water wheel on a naturally flowing river or a turbine combined with a reservoir. Good for: businesses near water sources. Watch out for: legal, planning and environmental restrictions.
• Biomass energy plant – biomass refers to organic materials, such as wood, straw and energy crops, which can be used to generate electricity, heat and power. The energy is released by burning. Good for: rural locations. Watch out for: legal restrictions in smoke controlled areas.
• Anaerobic digestion plant – another way of converting biomass into energy. This uses bacteria to break down the material to produce combustible gas. Good for: minimising waste because the by-products of the process may also be sold. Watch out for: cost of transporting the biomass to the plant and the reliability of the supply of biomass.
• Micro-combined heat and power (Micro CHP) – a small on-site power generation unit that burns mains gas, LPG, oil or bio fuel to produce electricity. Clean energy “feed in tariffs” are available on a limited pilot until March 2012.¹ Good for: domestic-size installations (under 2kw) only.

Benefits of generating energy

1. Income generation
If you install a renewable energy generation source that generates more electricity than you use you can sell the extra electricity back to the mains electricity supply company – this is called an export tariff. There are further tax breaks available in the form of “Green Energy Certificates” which you can sell to energy supply companies.

2. Cash back
In addition to the revenues from exported power you can also benefit from an additional “feed in“ tariff from your electricity company – sometimes referred to as a “clean energy cash back”. More details about which installations are eligible for this tariff may be accessed at the Feed in Tariffs website.

3. Secure supply and stable costs
Using renewable energy sources releases your dependency on fossil fuel supplies which are increasingly imported from overseas. Renewable energy generation protects your business from gas and oil price rises.

4. Tax relief
Legislation has set targets for the take up of renewable energy use in the UK. A major tax incentive is exemption from paying duty under the climate change levy. For more information on the benefits see our guide on how togenerate your own renewable energy.

Other cost-reduction opportunities

• Heat sourced from the ground is renewable energy that can be captured to reduce your space and water heating costs. Pump technology can be added and the process can be reversed for cooling (refrigeration). Good for: new build premises including homes. Watch out for: civil engineering costs for installation; continuing reliance on fossil fuels to drive pumps.
• Combined Heat and Power – a highly fuel-efficient means of generating electricity and useful heat in the same process. Good for: businesses with a steady combined demand for space or water heating and electrical power. (If the CHP generates more electricity than is needed, the excess can be exported to the national grid by agreement with the regional electricity company.) Find out more at our guide to Combined Heat and Power (CHP) benefits and opportunities for business.

Financial support
In addition to export and cash back schemes mentioned above, there are various schemes that support the adoption of these technologies by homes and businesses:

• Interest free loans from the Carbon Trust
• The CRC Energy Efficiency scheme
• The Renewable Heat Incentive (coming soon)

Many business owners may be put off by the relative complexity of these schemes and may not realise the benefits to the bottom line. Contact Business Link for details of information and training sessions in the South East of England.

To find out more about renewable energy and business, see the page on business opportunities in renewable energy generation in our guide on low carbon business opportunities.

For more information and links please visit Business Link SE

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