The Scottish Government has set an ambitious target of 40,000 homes to benefit from affordable low carbon heat from district heating. This is part of an overall target of 1.5 TWh of heat to be delivered by district heating by 2020, to both domestic and non-domestic properties. To help achieve this the Scottish Government has announced an increase in funding for the District Heating Loan Fund by over £4 million, making a total of £8 million available over the two years 2014 to 2016.
The District Heating Loan Fund provides loans for both low carbon and renewable energy technologies to help organisations implement district heating projects that benefit local communities. Loans up to £500K are available as low interest unsecured loans, with repayment terms of either 10 or 15 years. Loan terms for larger projects (over £500K) will be considered on a case by case basis. A typical interest rate of 3.5 per cent applies for low risk projects (dependent upon credit status). The scheme is open to local authorities, registered social landlords, small and medium sized enterprises and energy services companies [ESCOs] with less than 250 employees.
There is also financial support from schemes such as the Renewable Energy Investment Fund (REIF). Undertaking a District Heating Scheme is a big investment and will likely require several funding streams, large scale purchasing of equipment and a robust business model. These pages provide examples and advice around business models as well as links to legal (Go to Procurement) and contract advice.
For advice on help and support for your scheme please CONTACT us.