Domestic RHI announcement receives warm reception

Members of the industry have welcomed DECC’s confirmation of the financial support which will be available under the domestic RHI from next Spring.

The tariffs published today are at the higher end of indicative levels provided by DECC in its consultation of the scheme and homeowners now have the certainty of final eligibility criteria being published.

Stuart Elmes, chair of the STA‘s solar thermal working group, said: “This is a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world.

“From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

“In fact there’s every reason to install now because a Renewable Heat Premium Payment (RHPP) grant of £600 is available in the run up to the launch.  Although the value of this grant will be subtracted from the RHI payments, it will be taken over the course of the scheme, so householders installing between now and the start of the scheme will in effect be receiving their £600 early.”

“The fact that we now have an incentive scheme which not only aims to repay the installation costs with hopefully a little bit extra on top, but also allows people installing heat pumps to future-proof their supply and escape the continuous escalation of energy prices should result in millions of people across the UK benetting from this cleaner, safer and more efficient technology for years to come.”

Tim Minett, chief executive of biomass suppliers CPL Industries said: “We have been waiting a long time for these figures which bring much-needed clarity and should provide real impetus to the scheme. Homeowners can now commit with certainty to a renewable heating system and, with payments backdated to mid-2009 when the scheme was announced, they can go out and install them right now.

“The domestic RHI should be hugely popular as a fifth of the UK’s housing stock is not connected to the gas grid and most of those rely on expensive oil for their heating. Every single one of these homeowners would benefit as RHI payments will allow them to cut their fuel bills by thousands of pounds a year, while making a positive step in cutting carbon emissions.

“We are surprised the government is offering more for other technologies but still expect biomass systems will be the most popular by far. They are the easiest to retrofit to properties, simple to use and work in all weather conditions – a big factor in the UK – while 12.2p/kWh will cover the cost of installation, lower people’s fuel bills and provide regular income for years to come. What’s not to like about that?

“The chief stumbling block is lack of awareness among the public so what we desperately need now is for the government to step up and promote the scheme vigorously.”

Tim Bowen, president of the Heat Pump Association (HPA), said: “Domestic RHI includes a number of significant improvements over its Non-Domestic RHI cousin.

“A wider range of technologies will be rewarded, including both Air Source & Ground Source Heat Pump systems. Payments will be enhanced from the 20 year calculation model by being paid over a 7 year period. Unlike its predecessor RHPP, it will be available to dwellings that are also on the gas grid. Payments will also be related to predicted efficiency performance encouraging better practice.

“This long awaited incentive will give a much needed boost to the heat pump industry.”

Dave Sowden, chief executive of the Micropower Council, said: “Industry warmly welcomes the announcement of the long-awaited domestic RHI scheme which looks set to revolutionise the UK home heating market. The Micropower Council alongside the rest of our colleagues in industry have been campaigning for four years for this subsidy to come into effect, which we believe will transform the future of renewable heat in this country. Today is a positive step along the road to ensuring we hit our targets for carbon emissions reduction and renewables.”

“Today’s news is just what the industry has been waiting for,” said Phil Hurley, managing director at NIBE.

“After numerous delays and uncertainty surrounding the scheme, DECC’s announcement has been a welcome injection of confidence, providing clarity that secure, long-term tariff support will be made available to the domestic renewable heating technology mix.

“The link between the RHI and Green Deal is exciting. There’s no point fitting renewables (or any heating system) in homes that are poorly insulated because the heat will just escape out of the walls or the ceiling, so I’m happy a Green Deal assessment and minimum insulation requirements are needed.

“People can also combine Green Deal with the RHI, so it’s possible to get Green Deal finance to buy a ground source heat pump and claim the tariff money for the energy you produce. This makes renewables more affordable than ever.

“There are now plenty of new business opportunities for installers, but training is more important than ever. To fit renewables under RHI, installers need to be MCS accredited, and they need Green Deal training to be qualified to work under that scheme.

“People wanting to invest in renewable energy technologies to heat their homes will be able to do so with confidence at last following today’s announcement of the Renewable Heat Incentive (RHI),” said YouGen founder Cathy Debenham.

“The uncertainty about tariff rates that we have had for the past four years has meant many people putting investment on hold, or installing a fossil fuel boiler instead. The publication of the rates, and the eligibility criteria means that people can finally make an informed decision with all the information they need.”

Brian Smithers, european director, Rexel, said: “It has been a long time coming, but it is still great to finally see the domestic Renewable Heat Incentive policy announced. I really believe that the scheme will offer a massive boost to the renewable heat market, which makes this an exciting day for the industry. The policy has a lot of potential and it was a smart move by government to integrate the RHI with the Green Deal loan scheme to cover the upfront costs of installing the technology – which may have otherwise put people off – while still being eligible for the RHI generation tariffs.”

Darren McMahon, marketing manager, Viessmann, said: “After many months of waiting, DECC’s policy document provides long-awaited clarity for the renewable heating industry.

“The tariffs are a mixed bag when it comes to the attractiveness of the different technologies and the outright winner has to be ground source heat pumps. Receiving  the substantial tariff level of 18.8 p/kWh, this renewable energy source will be a better financial option than gas after only four years, when the initial investment has been paid back, assuming gas price increases continue at their current rate.

“Unfortunately, we can’t see biomass faring as well under the scheme. Unless the end user has access to free fuel/pellets, a tariff of just 12.2p/kWh (that’s 6.6 p/kWh less than ground source heat pumps) is unlikely to make biomass boilers a cost-effective investment, especially as the initial investment level is higher than for ground source heat pumps.

“The announcement is certainly good news for solar thermal sales. Eclipsed by the success of solar PV in previous years, the boost to at least 19.2 p/kWh will see payback brought forward to around ten years. Combined with future fuel savings, this makes the technology extremely viable and we’re extremely pleased that DECC will make this increase, as we’re convinced that solar thermal should play a big role in reducing energy demand and carbon production.”

Chris Davis, business development director for Dimplex Renewables and chairman of the BEAMA Domestic Heat Pump Association, said: “Rates have been set at an encouraging level and it is also pleasing to see changes to the tariff levels and value cap for ground source heat pumps and solar thermal, both of which were things that the industry commented on in last year’s consultation. The government has listened to the feedback from industry and I firmly believe the RHI will stimulate the market in the way that DECC hopes.”

“The industry has been waiting a long time for these figures and the announcement made by DECC is not only what we wanted to hear but necessary, also,” says Adrian Troop, Nu-Heat sales director.

“Homeowners that had put their plans to invest on hold and those now interested in heat pumps and/or solar thermal now have clarity on tariff rates; a clear financial incentive to commit to the installation of a renewable heating system.”