The Feed-in tariff is presently paid at a rate of 4.03p per kWh of electricity generated. The Renewable Heat Incentive is presently paid at a rate of about 6.88p per kWh for the size of the installations BHESCo intends to install.
The rates are subject to periodic derogation as determined by HM Treasury. This derogation will have an impact on the subsidy rates for future projects. Existing rates increase on 1st April in each year by the rate of inflation in the previous calendar year.
The energy generated by BHESCo's systems that is consumed by customers will be sold to them for up to 50% discount on their energy tariffs per kWh with the price fixed for a term of up to 20 years. The price reflects the cost and anticipated generation of the system and is set at a rate that, in a typical year, will enable interest to accrue to members at a rate of 5%.
Electricity generated that is not used by the customer will be sold via the grid for a guaranteed export tariff of 5.24p per kWh, increased each year by the rate of inflation. Solar panels generate most electricity and income in the summer. Biomass boilers generate most heat and income in the winter. By investing in both technologies, the Co-operative has a steady flow of income throughout the year.
BHESCo completed its first project in October 2015 and has now completed over 42 projects. The output of solar panels gradually reduces over time. This effect is reflected prudently in the project finance model.
BHESCo’s business plan includes income from other sources including Energy Surveys and EPCs, project management fees, consultancy income and grant funding for its charitable work and innovative projects.
Consultancy fees include license fees on products that BHESCo develops.