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2011 Budget Update-

John N Dunn Group would like to update you on the many activities that will be affecting the renewable industry. A lot has been happening in March with the Renewable Heat Incentive Scheme being announced, the Feed-in Tariff review and the recent Budget announcements from George Osborne.

2011 Budget
George Osborne’s announcement has had mixed reviews from the industry but here at John N Dunn the announcements shine a positive light over the future of domestic and small to medium sized business installations.

George Osborne offered a guarantee that all planning decisions – including appeals – would take no longer than 12 months and that major infrastructure aplications would be fast-tracked.
This is a promising announcement and will be interesting to see how this progresses. Essentially this will make a currently lengthily and sometimes laborious process allot more efficient and faster.  The government will consult on the level of capital allowances for microgeneration technologies from May and update the list of energy-saving technologies qualifying for "enhanced capital allowances". 

It's great news that the Government is going to look at tax breaks for microgeneration equipment through a consultation on capital allowances which should help reduce the upfront costs, and ensure more people can benefit from schemes such as the feed-in tariff and the Renewable Heat Incentive.

The chancellor removed the zero-carbon homes obligation that would have mandated new houses from 2016 to source all their energy from carbon-neutral sources. House builders are responsible for emissions from energy use through heating, fixed lighting, hot water and building services, but not those generated by cooking or plug-in electrical appliances.

The announcements provide a much needed boost for the construction sector with the introduced FirstBuy initiative providing £250m equity to help first time buyers enter the property market. The money it puts into supporting the purchase of a new home is not lost, as it retains an equity stake that can be recycled later. Meanwhile, it will probably cut its benefits payments and increase its tax take by the tune of between £10,000 and £20,000 for every new home that is built, by taking construction workers off the dole thus creating jobs within the construction trade.

Stamp duty will be calculated on the mean value of a property portfolio, which means that in most cases it will make it much lower. There will be a favourable view taken on ‘sustainable development’ planning and there will be more freedom at enterprise zone all of which may help construction work in the future.
Renewable Heat Inventive (RHI) Scheme
The £860m "renewable heat incentive" is the first financial scheme of its kind in the world to subsidise low-carbon heating (biomass boilers, heat pumps and solar thermal), and over the next decade could reduce carbon dioxide by 44m tonnes – equivalent to taking 20 gas fired power stations off the grid, according to government estimates.
First businesses and public sector organisations are expected to be the biggest beneficiaries of the plan in June 2011, though households will be able to take advantage of the full range of subsidies from October 2012.  Even those early renewable heat adopters can benefit from the tariffs because they will be paid for 20 years to the eligible technologies that have been installed since July 2009.

Tariff Name Eligable Technology Eligable Sizes

Tariff Rate (pence/kWh)

Tariff Duration (years) Support calculations
Small Biomass

 Solid Biomass; 


 Less than 200kWth

Tier 1:  7.6

Tier2:  1.9



Tier 1 applies annually up to the Tier Break

Medium Biomass

 Solid Biomass; Municipal Solid Waste (incl.CHP)

200 kWth and above; less than 1000kWth

Tier 1:  4.7

Tier 2:  1.9


Tier 2 above the tier break. 

The Tier break is: installed capacity x 1,314 peak load.

Large Biomass   1000kWth and above  2.6  20  Metering
Small Ground Source

 Ground source heat pumps;

 Water-source heat pumps

Less than    100 kWth

 4.3   Metering
Large Ground Source Deep geothermal  100 kWth and above  3 20  Metering 
Solar Thermal  Solar Thermal  Less than 200 kWth  8.5 20  Metering 
Biomethane Biomethane injection and biogas combustion, except from landfil gas  Biomethane all scales, biogas combustion less than 200 kWth  6.5  20 Metering


 Feed-in Tariff
On 7 February 2011, the start of the first comprehensive review of the FITs scheme for large-scale low carbon electricity generation was announced, which would:

• fast-track consideration of large scale solar projects (over 50kW) with a view to making any resulting changes to tariffs as soon as practical, subject to consultation and Parliamentary scrutiny as required by the Energy Act 2008; and
• alongside the fast track review of large scale solar PV, undertake a short study into the take-up of FITs for farm based Anaerobic Digestion plants.
Tariff levels, for technologies installed between 15th July 2009 and 31st March 2012 of most significance to householders and SME’S

Technology  Scale     Tariff Level  (p/kWh) Tariff Lifetime
Solar Electricity (PV) ≤ 4kW (retrofit) 43.3 25
Solar Electricity (PV) ≤ 4kW  (new build) 37.8 25
Solar Electricity (PV) > 4-10kW 36.1 25
Solar Electricity (PV) > 10-100kW 31.4 25
Solar Electricity (PV) > 100 - 5MW 29.3 25

The consultation document published suggests changes to the tariffs for solar photovoltaic (PV) installations that are larger than 50 kilowatts will come into play for all future installations from August 2011. The proposed new bands and tariffs are as follows:

For large PV installations:
• >50kW - ≤150kW: 19p/kWh
• >150kW - ≤250kW: 15p/kWh
• >250kW - ≤5MW: 8.5p/kWh

So we urge those looking to install anything under 50 kW to act now to get the best rates for 20 years plus.  There are incentives to act sooner rather than later!  Those installing this year will also see an increase in tariffs in line with inflation.

We can help
The John N Dunn Group is a leading national building services company based in the North East.  It delivers outstanding renewable, plumbing, heating, electrical, mechanical and security services to the construction industry as well as installation, repair and service for the facilities management, commercial and residential sectors.  For more information, please contact us.

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