From December the 12th 2011, the coalition will cut the subsidy to the Feed in Tariff (FITs) by 50% to PV solar panels.  Many in the renewable energy sector have labelled this as devastating to the solar industry. For the third time this year, changes have been made to the FITs making investors quite shaky.

It seems at a time when the solar industry was just taking off in this country, the cuts will hamper it’s growth.

For Norfolk County Council and their new ECSO, this might mean they will be investing less in Solar PV.  Having spoken to one of the County Councillors, I was informed that this is a set back but the Council will be speaking with suppliers about how to bring the installation costs down. 

Nevertheless, it’s clear that, out of the money Norfolk County Council has secured for their ESCO, less may have to be invested in PV solar.

This mean that alternative forms of renewable energy creation will be considered. One which may be attractive is heat pumps.  The Council has the land assets to install heat pumps in Norfolk, from Great Yarmouth to Kings Lynn.  

With the Renewable Heat Incentive coming into force next year. The Council will be able get significant returns for investing in heat pumps.  Whether its air source heat pumps on Norfolk buildings or ground source heat pumps on Norfolk land, the Council has 16,000 acres of land and 1000 buildings at its disposal.

2012 could be the year of heavy investment of heat pumps in Norfolk. Watch this space.  

In April 2010 the widely used feed in tariff scheme was introduced to the UK and I briefly outlined what this does in my previous post. The scheme is so successful it is currently in place in around 40 countries. The renewable heat incentive’s first phase started in July 2011.

The renewable heat incentive is a world first, but works on the same basic idea of feed in tariffs (rewarding investors of renewable energy with monetary incentives). However there are some key differences; the returns on investment are paid by the Treasury and not energy users like feed in tariffs, there is no national grid for heating, so you cannot sell heat on and it’s being introduced in phases (residential schemes are not introduced until stage two). So although it will not be until phase two, Norfolk County Council’s energy service company will most likely invest in heat pumps in Norfolk.

It was decided this week after much debate that the Norfolk County Council would set up an energy services company (ESCo). This company will owned by the county council but will operate independently and it will manage and oversee investments in renewable energy.

It may seem like an odd time to be heavily investing renewable energy, with so many cuts etc., however on closer inspection it is actually a great way to make money. What makes renewable energy investment so lucrative is the recent government schemes, initially the feed in tariffs. The feed in tariffs pay those who invest in renewable electrical energy sources (like solar panels), with a generous return on investment which is tax free for 25 years, not to mention that you can sell any unused electricity back to the grid.

With the first phase of a similar scheme based on renewable heat being put in place in July of this year (the renewable heat incentive), it would follow that the energy services company would also consider investing in heat pumps. Heat pumps take a certain amount of land to install and with Norfolk county council being the second biggest land owner in the county; it would make sense for some large scale investments. Overall it is likely we will be seeing many more heat pumps in Norfolk.