Dynamic Heating Services

DHS Supports Governments' Green Light for Renewable Heat Incentives

Posted on 23.02.10 at 13:06 by Administrator

On 1st February, the Government announced the launch of new incentives for small-scale green electricity generation and it’s plans to encourage low-carbon heating technologies as it seeks to boost renewable energy supply to meet the EU 2020 climate change targets.

With the unveiling of the Feed-in Tariffts (FIT) and the renewable Heat Incentive (RHI), households and communicaties that install generating techologies such as solar panels and wind turbines will be able to claim payments for the low carbon power they produce.  These ‘clean energy back’ schemes are designed to bring about a significant increase in the amount of locally produced green energy, as a contribution to the wider shift of the energy mix to low carbon.

A typical 2.5kw sol

The FIT (Feed-in-Tariffs) scheme applies to electricy generation and will be launched in April this year.  The RHI (Renewable Heat Incentive) applies to heat production and will be activated in April 2011.

FITs pay electricity consumers a fixed rate for every kilowatt hour of renewable electricy they generate from small renewable power sources.  Payments will extend over a term of 20 years from the date the system is first registered for most technologies; solar photovoltaic will receive a 25 year payout period.

The Government claims that a typical 2.5kw solar PV installation could reward the homeowner with as much as £900 for electricity fed back into the grid and save them £140 per year on their own electricity bill.

Ed Milliband says that the guarantee of getting an income on top of saving on energy bills will provide an incentive to householders to invest in a technology that might otherwise provide financially prohibitive.

The feed-in tariff will change the way householders think about their future energy needs," says Milliband, “making the payback for investment far shorter than in the past.  It will also change the outlook for a range of industries, in particular those in the business of producing the installing small-scale low carbon technology”.

The RHI scheme is being hailed as a world first, as it will guarantee payments for those who install renewable heat equipment such as solar water heating panels, heat pumps and combined heat and power units.  It is anticipated that the RHI will play a major rolein the reduction of fossil fuel gas imports and kick-start the mass deployment of sustainable heating systems.

Under the proposed tariffs, payments will be determined either on the exact amount of heat generated as measured by a meter, or on the amount it is anticipated the installation will provide, a so-called ‘deemed output’. Tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heating systems and will apply to installations of all sizes, from domestic to industrial.

The UK’s renewable heat industry currently makes up less than 1% of its total output.  The RHI proposals are expected to deliver 12% of the EU renewable energy target of 15% by 2020.  The policy will provide a long term stable framework that may give industry confidence to expand so that renewable heat becomes a mainstream option.

Renewable Energy Association Policy Director Gaynor Hartnell comments. “Renewable heat is the sleeping giant of renewable energy in the UK with a major contribution to make.  The sooner we invest the build capacity in the renewable heat industry, the better value and energy security this will bring the UK- and the more jobs will be created.”

While the Government’s proposals have been broadly welcomed by stakeholders, there are some reservations about the details of the scheme.  Worcester Bosch has voiced concerns that a key provison of the RHI may exclude a majority of installers.

Neil Schofield, Head of Sustainable Development at Worcester Bosch, says: "The Achilles’ heel of the Government’s proposals is it’s reliance on the Microgeneration Certification scheme to ensure installers are qualified to install renewables.   This has the potential to derail the entire scheme.

“To date, only approximately 350 installers across the UK have registered as part of the the MCS Scheme, with many being deterred by high levels of bureaucracy, red tape and fees which make becoming a ‘sustainable’ installer a very onerous task.”

Another concern is that householders may still regard the initial outlay required to purchase a low carbon energy generation system as prohibitive.  Scholfield continues:“It is unlikely that the final proposal will contain help for consumers witht he upfront captial cost of a renewable installation.  We will be pushing hard to ensure that the RHI proposal for annual payments is sufficiently attractive to ensure households are incentivised to install a renewable solution.”