Whilst the economic headlines generally make for depressing reading, there is one area of the economy enjoying a boom: the green sector. This is largely thanks to the Government's generous support for technologies that help lower our carbon footprint. It isn't often that the Government gives money away, particularly when budget cuts are the norm. However there are rich pickings for homeowners willing to invest in green technologies, with VAT charged at only five percent and various subsidy schemes available.
Feed-in Tariffs (FITs)
Since April last year, homeowners have enjoyed receiving payments on the electricity they produce from photovoltaic (PV) panels at a rate of more than four times its market price, even if homeowners use all the electricity themselves. The payments last for 25 years, giving annual returns of up to nine percent. An additional 3.1p per unit is paid for any electricity exported to the National Grid. However, electricity suppliers automatically assume that 50 percent is exported, giving homeowners an additional bonus.
Renewable Heat incentive (RHI)
Great excitement greeted this year's Green Budget, with the announcement of an initial £860m towards the RHI scheme. Like FITs, RHIs are intended to reward homeowners for investing in renewable technologies such as heat pumps and biomass boilers, helping these 'early adopters, bridge the cost gap between traditional boilers and the new equipment. While the main scheme is due to commence in October 2012, the Government announced one-off payments this year of up to £1,250 for those taking the plunge.