Industry shows support for rise in RHI tariffs

Trade bodies and industry leaders have broadly welcomed the overall rise in tariffs for the commercial RHI.

The Department of Energy and Climate Change has made proposals to increase tariffs for solar thermal, ground source heat pumps and large biomass installations, whilst payments for medium-sized biomass installations would decrease by five per cent under the RHI’s new degression mechanism announced in March.

The consulation is currently open until June 28, after which DECC will confirm the planned changes.

The STA  said that raising the incentive for solar thermal would increase uptake and give a much-needed boost to the market.

“Commercial solar thermal has had a very low uptake to date, mainly due to the low tariff which was restricted by the methodology behind the ‘value for money’ cap (a gov’t rule that it will not spend more on any renewable technology than offshore wind),” said STA ceo, Paul Barwell.

“We are pleased that our lobbying has resulted in a change in approach to the cap methodology and congratulate the RHI team on its efforts in improving the level of support.”

Dave Sowden, chief executive of the Micropower Council, added: “The proposals for increased levels for biomass, GSHP and solar thermal are good news for industry. With deployment levels in the non-domestic Renewable Heat Incentive so far having been unsatisfactory, we have been awaiting this tariff review consultation announcement for some time. The introduction of the new tariff levels would help provide the boost needed to increase deployment, not only providing support to industry but also helping the UK on its pathway to renewables.  This is the consultation stage and we are some way from the tariffs being introduced but this provides a good demonstration of the government’s commitment to support the UK renewable heat industry.”

A spokesman for the Heat Pump Association said: “The Heat Pump Association welcomes the Tariff Review consultation issued by DECC. Whilst this is only a review of Tariffs of the existing technologies in the Non-Domestic  RHI, this maintains momentum and hopefully will keep the whole RHI process on track.

“The proposed range of increase in tariff for GSHP, although a little less than hoped for, should be sufficient to help stimulate the market but by how much is difficult to predict in such unchartered territory. The indicative levels for ASHP, anticipated to be included in Non-Domestic RHI in Spring 2014, again appear to strike a good balance. The HPA also welcomes the acknowledgement of Air to Air Heat Pumps as an existing and positive contributor to Renewable Heat, but not requiring additional support.

“The consultation puts  the ball back in the court of industry stakeholders to come up with evidence based  feedback for DECC to consider.”

In addition, Greg Barker has today confirmed that new rates would apply to all installations registered after January 21.