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The Ecogen micro-CHP unit looks and behaves like a conventional gas boiler
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The Ecogen will generate electricity at times of peak demand
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Micro-CHP could lead to a generation payment of £180 a year
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The Government has announced the final details of its Feed-in Tariff (FIT) scheme, which is designed to support the uptake of small-scale, low-carbon electricity generation and help to deliver the UK’s 2020 renewable targets. Set for introduction in April 2010 as part of the Energy Act, FITs will financially reward homeowners who install microgeneration technologies in their homes. The scheme will cover domestic installations of renewable microgeneration technologies below 5MW, initially including solar photovoltaics, wind and hydropower, anaerobic digestion and a new generation of micro-CHP boilers.
Tariff levels
FITs consist of two parts: a generation tariff, whereby the electricity supplier will make a fixed payment to the householder for every kilowatt hour (kWh) of electricity they generate, and an export tariff, whereby the supplier pays a fixed amount for every kWh of electricity exported by the householder back to the electricity grid. At present, the tariff levels vary according to the type of microgeneration system installed. For example, the generation tariff for micro-CHP is set at 10p/kWh whilst the export tariff is fixed at 3p/kWh, which will make a valuable contribution to increasing take-up of the technology.
Scheme eligibility
Another important point is that, to be eligible for FIT, both the microgeneration product and the installer who fits it must be Microgeneration Certification Scheme (MCS) accredited. The MCS has been introduced by the Government to evaluate the quality of microgeneration products and installers, to protect consumers and to ensure that Government money is spent effectively. When a system is installed the utility provider will need to be notified so that the FIT can be paid. The utilities are still developing the systems that will administer FIT payments but it is likely that FIT values will appear as a separate line on the householder’s utility bill.
Commercial opportunities
For the forward-thinking developer, FITs represent a market opportunity. Housebuilding is a fiercely competitive market, and being able to offer prospective purchasers added value is a tangible way to generate interest and differentiate from the competition. Buyers can easily understand the benefits: all the electricity they generate onsite can offset some or all of the electricity they would otherwise have to buy from their energy provider – thereby, reducing their electricity bill. It also fits nicely with the long term nature of a house purchase as FIT will be paid for a minimum of 10 years from the date the system is first registered.
Benefits of micro-CHP
Micro-CHP is a great, low-risk way to stand apart. The Baxi Ecogen, for example, is a well-proven unit which looks and behaves just like a conventional gas boiler. It also takes up the same space as a standard wall-hung boiler, making specification and installation straightforward. This type of microgeneration has some unique benefits, such as generating electricity at times of peak electrical demand, thus maximising greener onsite use, helping to alleviate fuel poverty and relieving the pressure on centralised power stations at times of peak demand when the most carbon intensive generating equipment is employed. In addition, it doesn’t rely on building orientation or weather conditions to generate electricity.
Annual payback
Under FIT, the Baxi Ecogen could generate a significant annual payback. In a typical household, homeowners could expect the unit to generate an estimated 1800kWh a year (precise levels will vary according to the installation and the home). So, as a guide, 1800 x a 10p generation tariff gives a total generation payment of £180 a year. Based on 50% of the generated electricity being used in the dwelling, there is an additional benefit of £108 through grid avoidance in addition to the £27 for export.
The long view says that micro-CHP is the ideal green technology for the home – easy to specify, simple to install and extremely efficient. In the short term, the Government is unsure of how fast take up will be and has said that the tariff will only be available for the first 30,000 micro-CHP installations. However, they also say that a review will take place when 12,000 units have been installed. All things considered, it will be a smart developer that gets in early and embraces micro-CHP.
Simon Osborne is specification channel manager at Baxi Group. Click here for further information on Baxi's Ecogen.
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