Does the RHI increase signal the end of the gas boiler?? Renewable Heat Incentive Breaking News

The Department for Business Energy and Industrial Strategy has just announced some significant changes to the RHI. The full consultation response was published yesterday but the highlights are as follows:

• The Air Source Heat Pump RHI will increase from 7.51p to 10.02p, an increase of 33% 
• Biomass RHI will increase from 4.21p to 6.44p, an increase of over 50% 
• Solar thermal remains eligible for Domestic RHI but no change to the rate of 19.74p/kWh, although only until 1st April.
• AND IMPORANTLY - Although the new rates don't take effect until 1st April 2017, any install between now and then will automatically move on to the higher rates in April. 

There is a cap on the total heat claim for biomass of 25,000 kWh and 20,000kWh for heat pumps. The caps only apply to installs registered after April, so properties with heat losses higher than the caps would be advised to have an installation completed ASAP.

We think these changes prove that the Government is committed to helping properties move away from carbon intensive heating systems such as mains gas. In particular the improvement to the RHI for air source heat pumps is very significant and will help to bring the technology into the mainstream.

While an Air Source Heat Pump is only marginally cheaper to run than a mains gas boiler there are other important benefits, such as:

• Our calculations indicate that an average 3/4 bedroom property should expect the RHI to pay for the full cost of installation over 7 years with some money left over to put towards heating costs.
• Houses with Solar PV can expect the solar to contribute towards a proportion of the heating costs in Summer, Spring and Autumn. A reasonable contribution from a 4kW PV system would be between 7-10%.
• Heat pumps are a time served reliable technology which are arguably safer than gas boilers due to no production of carbon monoxide or risk of explosive gas leaks.
• Houses with electric cooking facilities can disconnect the supply and stop paying gas daily standing charges.

Thank you for taking the time to read our newsletter, more information on our products and services can found on our website www.ctsrenewables.co.uk or you can call our office on 01623 422254.

Kind Regards

Matthew Baxter 

DECC confirms domestic Renewable Heat Incentive (RHI) tariffs

Householders could get paid hundreds of pounds a year for heat generated by solar thermal panels, biomass boilers and heat pumps, Energy and Climate Change Minister Greg Barker confirmed today.

The tariff levels have been set at 7.3p/kWh for air source heat pumps; 12.2p/kWh for biomass boilers; 18.8p/kWh for ground source heat pumps and at least 19.2 p/kWh for solar thermal.

The new Renewable Heat Incentive (RHI) for householders is designed to drive forward uptake of renewable heat technologies in homes across Great Britain to cut carbon, help meet renewables targets and save money on bills. The scheme is a world first, and has been up and running for the non - domestic sector since November 2011.

Today’s announcement follows extensive consultation on how a financial incentive would work best for householders and takes into account lessons learned from the Renewable Heat Premium Payment grant scheme (RHPP) and the RHI non domestic scheme.

Greg Barker said:

“The Coalition is committed to helping hardworking families with the cost of living.

“Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the Coalition is 110 percent committed to boosting and sustaining growth in this sector.”

Eligible applicants

The scheme will be made available to homeowners, private and social landlords, third party owners of heating systems and people who build their own homes. Anyone who has installed a renewable heat technology since 15 July 2009 and meets the scheme eligibility criteria will be able to join the scheme.

Eligible technologies

RHI domestic will support air to water heat pumps; biomass only boilers and biomass pellet stoves with back boilers; ground and water source heat pumps; flat plate and evacuated tube solar thermal panels.

Tariff payments

Payments will be made on a quarterly basis for seven years. The tariffs have been set at a level that reflects the expected cost of renewable heat generation over 20 years. In most cases, payments will be made based on estimated heat demand of the property. DECC will offer an extra set payment of £230 per year where consumers take out metering and monitoring support packages for heat pumps and £200 for biomass boilers.

Scheme requirements

Applicants will need to complete a Green Deal Assessment before submitting their application and must ensure they have met minimum loft (250mm) and cavity wall insulation requirements, where appropriate. All installations and installers must be MCS certified (or certified by an equivalent scheme). MCS certified installers are currently required to be members of the Renewable Energy Consumer Code, which is backed by the Trading Standards Institute.

Covering the upfront costs of renewable heating kit

Money off vouchers are available under the RHPP scheme. Householders who receive money under RHPP will have this amount deducted from any future RHI payments to avoid a double subsidy.

The RHI for householders will be administered by Ofgem and more details on how to apply will be published in due course. Pre-application enquiries should be directed to the Energy Saving Advice Service on 0300 123 1234.

DECC is currently finalising the details of the expansion of the non-domestic RHI scheme and will confirm the way forward in the autumn alongside the outcome of the tariff review. DECC’s aim to introduce these changes from Spring 2014 remains unchanged.

Government has also published the response to the consultation on revisions to the Combined Heat and Power (CHP) Quality Assurance programme which determines eligibility of this technology for support under the Renewables Obligation. The changes will apply to new CHP plants and will come into effect on 1 January 2014.