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The Renewable Heat Incentive arrives at last

Energy World; 01/05/2014

After years in developments and a series of false starts, the government has launched a scheme that will pay people for the ‘green heat’ that they generate for their homes. The domestic Renewable Heat Incentive (RHI) is the world’s first long-term financial support programme for renewable heat, offering homeowners payments to offset the cost of installing low carbon systems in their properties.

The scheme is open to everyone – home owners, social and private landlords, and people who build their own homes. It is available to households both on and off the gas grid.

Technologies currently covered by the scheme are:

· biomass heating systems, which burn fuel such as wood pellets, chips or logs to provide central heating and hot water in a home;

· ground or water source heat pumps, which extract heat from the ground or water that is then used to provide heating and/or hot water;

· air to water heat pumps, which absorb heat from the outside air to be used to provide heating and/or hot water; and

· solar thermal panels, which collect heat from the sun and use it to heat up water which is stored in a hot water cylinder.

The scheme is designed to bridge the gap between the cost of fossil fuel heat sources and renewable heat alternatives. The guaranteed payments will be made quarterly over seven years for households in England, Wales and Scotland (Northern Ireland has its own RHI scheme). Payments range from 7.3 p/kWh for heat produced by air-source heat pumps, to 19.2 p/kWh for heat from solar thermal panels.

Minister for Energy Greg Barker said: ‘This is the first scheme of its kind in the world – showing yet again that the UK is leading the way in the clean energy sector. It opens up a market for the supply chain, engineers and installers – generating growth and supporting jobs as part of our long-term economic plan.’

The scheme has been widely welcomed; with the Renewable Energy Association saying that its introduction could make 2014 a breakthrough year for renewable heating.

However, consultant Delta Energy & Environment (Delta-ee), which has been researching the low carbon heating market since 2004, advises caution. While recent customer research with rural on and off-gas home owners reveals that the RHI scheme has high appeal for many customers, the same research reveals a number of potential barriers that could reduce uptake. These include: costs and bureaucracy associated with the link to Green Deal Assessments; continued lack of awareness of low carbon technologies among both customers and installers; and customer fear of moving from old familiar technology to new ‘unproven’ technology.

This makes a market boom unlikely, says Delta-ee, with market evolution, not revolution more likely. The industry will have to work hard to make it a success – particularly to educate installers and customers, and to reassure customers that heat pumps, biomass and solar thermal are not ‘high risk’ technologies.

News Item details

Journal title: Energy World

Keywords: Renewables - heat pumps

Countries: UK -

Organisation: Renewable Energy Association

Subjects: Banking, finance and investment, Policy and Governance, Biofuels, Jobs, Green Deal