UK Domestic RHI - A Step Forward, But No Certainty Over Tariffs
3 Pages
English

UK Domestic RHI - A Step Forward, But No Certainty Over Tariffs

Downloading requires you to have access to the YouScribe library
Learn all about the services we offer

Description

UK Domestic RHI - A Step Forward, But No Certainty Over Tariffs PR Newswire EDINBURGH, Scotland, September 20, 2012 EDINBURGH, Scotland, September 20, 2012 /PRNewswire/ -- thToday (20 September 2012) DECC launched the consultation on the proposals for a domestic Renewable Heat Incentive (RHI) scheme. While it is positive that the scheme is now being consulted on, DECC has been unable to provide the clarity many in the industry would liked regarding the RHI tariff levels. DECC has proposed broad 'illustrative' tariff ranges of 6.9 -11.5p/kWh for Air Source Heat Pumps (ASHP), 12.5 - 17.3p/kWh for Ground Source Heat Pumps (GSHP), 5.2 - 8.7p/kWh for biomass pellet boilers and 17.3p/kWh for Solar Thermal. It is currently proposed that the final tariff would be fixed over a payment period of 7 years.

Subjects

Informations

Published by
Reads 24
Language English
UK Domestic RHI - A Step Forward, But No Certainty Over Tariffs
PR Newswire EDINBURGH, Scotland, September 20, 2012
EDINBURGH, Scotland,September 20, 2012/PRNewswire/ --th Today (20September 2012) DECC launched the consultation on the proposals for a domestic Renewable Heat Incentive (RHI) scheme. While it is positive that the scheme is now being consulted on, DECC has been unable to provide the clarity many in the industry would liked regarding the RHI tariff levels. DECC has proposed broad'illustrative'tariff ranges of 6.9 -11.5p/kWh for Air Source Heat Pumps (ASHP), 12.5 - 17.3p/kWh for Ground Source Heat Pumps (GSHP), 5.2 - 8.7p/kWh for biomass pellet boilers and 17.3p/kWh for Solar Thermal. It is currently proposed that the final tariff would be fixed over a payment period of 7 years. Early analysis by Delta-ee has found that at the upper end of the band, the [1] proposed tariffs will deliver attractive paybacksfor renewable heat technologies, summarised as follows:
 Paybackwithout Paybackwith RHI  TechnologyRHI (Years)(Years) Impact  Offgas Ongas Offgas Ongas
 Potentiallyhuge,  ASHPare the only  Airsource technologywith  heatpump potentialto really  (ASHP)13 342 4compete on-gas.
 Positivebut high  Groundsource upfrontcost  heatpump Doesnot remainsa critical  (GSHP)29 payback 69 issue
 Positivebut  biomassis poorly  Biomasspellet perceivedby many  boiler16 854 7customers
 Mildlypositive - butsolar thermal  willhave to  competewith solar  Solarthermal 3363 17 33PV
Source: Delta-ee, 2012
At the upper end of the tariff band, ASHP technology
an annual RHI payment of around £2,000 - enough to pay back the marginal costs within 2-4 years.However, even at this tariff level, an uncontrolled 'heat pump' boom is unlikely:
Renewable heat is not the same as PV: installing PV is a discretionary decision about 'adding' a technology into a home - in contrast, heat pumps usually replace existing heating systems.For most existing homes, the decision to change a heating system is complex, and usually happens when the current system becomes obsolete. [2] Upfront capital cost remains a critical barrier for uptake of renewable heat: While these tariffs could give attractive paybacks, the upfront cost for many potential customers may still be prohibitive unless the market is able to deliver financing solutions. The'customer journey'is long:To be eligible for the RHI customers must have completed all of the Green-Deal "green ticks" on their Green Deal assessment that relate to thermal efficiency (excluding solid wall insulation). This adds extra steps to the customer journey - and some customers could be put off by the potentially lengthy process. RSLs could be a missed opportunity:RSLs may not be eligible for the domestic RHI tariffs proposed by DECC - however, they represent a core market for low carbon [3] heating (over 40% of 2011 retrofit installs were in social housing). What happens after year 7?: if the RHI payments suddenly stop in year 7, customers could see a risk of higher energy bills from year 8 (eg if they have switched from gas to electric heating)
Stephen Harkin, GB Microgeneration Research Service Manager at Delta-ee stated: "Today's announcement is a step forward on the long journey to define the domestic RHI.Our analysis shows that the scheme could kick-start the domestic market for renewable heat, but the lack of clarity about RHI tariffs remains frustrating". For further information, or to receive a copy of our full briefing document, please email Jan Hughes, Business Development Executive at jan.hughes@delta-ee.com or call 0131 625 1011. Notes: 1. Paybacksare calculated on the marginal cost of installing a low carbon heating solution, compared to the fossil fuel boiler that would otherwise have been installed. 2. Delta-ee/ Accent customer research of 1000 owner occupiers identified up-front cost as a primary barrier to microgeneration 3. Delta-eeGB Microgeneration Service 2012
About Delta-ee
Delta-ee (http://www.delta-ee.com) is anEdinburgh-based energy consulting company specialising in decentralised energy and low carbon strategies.The GB Microgeneration Research Service evaluates customer attitudes, analyses technology performance & economics, and forecasts market development of microgeneration technologies inGreat Britain. Delta-ee supports clients through providing commercial insight, market expertise, technology and product analysis, policy analysis and forecasts.Clients include many of the major heating equipment manufacturers, energy companies, and technology
developers from around the globe. Contact Information Jan Hughes Business Development Executive Delta-ee Registered offices:Edinburgh, Scotland Contact: jan.hughes@delta-ee.com, +44-131-625-1011