Risks
Some of the potential risks associated with a large scale rollout of micro-CHP include:
Annual micro-CHP yield
This will vary from year to year and from site to site. For example, years of warmer weather will generate less electricity than the estimates used in the examples. However, unlike solar PV, micro-CHP installations are not affected by building orientation or weather, therefore yields should be maximised.
Changes in FiT rates
The FiT generation payment for micro-CHP units is fixed for 10 years at 10pkWh, which will be linked to RPI to account for inflation. The tariff is available for the first 30,000 units installed.
Shortage of supply
Shortage of micro-CHP units is not an issue during the early years as many of the components are shared with existing boilers. Discussions on availability and lead times should form part of the tender process and contract negotiations.
Resistance by tenants
Some tenants may not welcome the disruption, but if the micro-CHP installation is part of a boiler replacement programme this should be minimal. There are no changes required to the building fabric or structure of the dwelling, and installations are likely to take a maximum of 1 day.
Ownership
Ownership of the micro-CHP units may rest with a third party investor or the Council, yet tenants have a right to buy. Clauses within the sale agreement should allow the Council to maintain ownership of the micro-CHP unit and to ensure receipt of the FiT export payment from the existing or future tenant after sale of the property over the remaining period of the FiT scheme.
Vandalism, theft and damage
Risks relating to damage from natural causes during the lifetime of a micro-CHP unit are considered low. Damage through vandalism could occur but there have been no reported incidents with micro-CHP installations. Theft is another possibility; however the weight and electrical connections should deter this.
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