Renewable Heat Incentive Proposals Outlined in DECC statement.
RHI ready for Summer 2013?
DECC have this afternoon published the long awaited and much delayed consultation setting out details for the Domestic RHI.
Please note that these are all proposals and may change – this is a really open consolation and we believe a lot could change based on the consultation response.
- The RHI for householders, to be managed by Ofgem, will be launched late summer 2013.
- It is aimed at any householder looking to replace their current heating with renewable heating kit or householders who have installed any such technology since 15 July 2009.
- MCS kit and installer requirement – same as FiT scheme
- Tariff lifetime proposed to be 7 years, but based on useful heat for 20. Payments would be quarterly
The following four core domestic renewable heating technologies will be eligible for the domestic RHI (specific details are in the consultation):
- Air source heat pumps (ASHP) Only air to water systems are included initially. Minimum COP of 3.2. SPF of 2.5
- Biomass boilers (Biomass) (biomass-only boilers and biomass pellet stoves with back boilers will be eligible for the RHI provided they meet 99% of the peak space heating load of the property using the calculation methodologies in MCS) Considering fuel sustainability (possible approved fuel supplier list) and air quality issues as part of consultation
- Ground source heat pumps (GSHPs). Proposed minimum COP of 3.5 SPF of 2.5
- Solar thermal (ST)
- Tariffs caped at the equivalent price of offshore wind
5.2 - 8.7
6.9 - 11.5
12.5 - 17.3
- DECC modelling shows that on the basis of the upper limit of the ranges, this could result in around 3.3 TWh/year (c.380,000 installations) of additional renewable heat by 2020.
- Proposal for different tariff lifetime and design for biomass to deal with the risk of consumers switching back
- Acknowledgement that based on proposed tariff solar thermal and GSHP deployment expected to be very low. Therefore considering what alternative approaches there may be to incentivising these technologies
- Proposing that the tariff levels are set to be more financially advantageous to those homes off the gas grid, although DECC propose that the scheme be open to any home in the UK wishing to make the transition.
- Those who have installed with an RHPP grant will be eligible, but this payment will be deducted from their RHI payment (either by lower annual payment, or shorter tariff lifetime)
- Consulting on a universally available tariff scheme vs. a phasing in or pilot roll out – this is potentially a big concern.
- Legacy installs (post July 2015 joining the scheme) could crash the system and cause budget problems. Proposal to stagger applications from legacy installs over the 1st 6 months.
- In the majority of cases, DECC propose that payments would be made on the basis of deemed heat usage (a calculation of the expected heat usage for the property), with a statistically significant proportion of installations being metered for evaluation purposes.
- Different proposals for how to deem, main one seems to be based on MCS installer’s calculation.
- DECC are proposing that consumers would be permitted to keep an alternative fossil fuel system as backup in some cases, provided they install a meter. A backup fossil fuel system would not be allowed where consumer are installing biomass boilers (Except in conjunction with an immersion heater)
- To support DECC’s ‘whole house’ approach to efficiency, they are proposing that in order to receive the domestic RHI, consumers will be required to have completed all green ticks on their Green Deal assessment that relate to the thermal efficiency of the house, with the possible exception of solid wall insulation (these are measures that would be fully financeable under the Green Deal with no upfront costs). Proposal to exclude solid wall insulation (green tick due to ECO finance)for first 2 years of scheme. This could be a big barrier to take up, measures required to be undertaken could include under floor insulation and internal wall insulation
- System of RHI tariff degression based on deployment levels similar to FiTs system
- Proposal for consumer to be required to make an annual self-declaration about still using the renewable heating. Potential for spot checks on RHI beneficiaries.
DECC Press release - http://www.decc.gov.uk/en/content/cms/news/pn12_106/pn12_106.aspx
Next steps on Renewable Heat
20 September 2012
Progress on support for renewable heat hots up today with the publication of three consultations on the Coalition’s Renewable Heat Incentive scheme (RHI). The RHI, the first of its kind in the world, was launched for the non domestic sector in November last year, with a scheme for householders intended to open in Summer 2013.
Renewable Heat Incentive for householders
Proposals on long term support for householders who install renewable heating kit such as biomass boilers, heat pumps and solar thermal in their homes across the nation have been published for consultation today. The RHI for householders, to be managed by Ofgem, is aimed at any householder looking to replace their current heating with renewable heating kit or householders who have installed any such technology since 15 July 2009. It is intended that householders will get paid for the heat expected to be produced by their installed technology.
Key proposals in the consultation include:
- Indicative tariff ranges for air source heat pumps (6.9-11.5p/kWh), biomass boilers (5.2-8.7p/kWh), ground source heat pumps (12.5-17.3p/kWh) and solar thermal technologies (17.3p/kWh) that are MCS certified and meet relevant required standards
- Payments for householders over seven years for each kWh of heat produced for the expected lifetime of the renewable technology and based on deemed heat usage
- Tariff levels set to provide a better return for householders living off the gas grid
- Budget management system similar to one introduced for the Feed-in Tariffs scheme
- Minimum energy efficiency requirements based on Green Deal assessments
Energy and Climate Change Minister Greg Barker said:
“We need to revolutionise the way we heat our homes and businesses and move away from expensive fossil fuels, not only to cut carbon but to help meet our renewables targets and save money on bills.
“Our proposals aim to encourage even more uptake of clean green heating in industry and in our businesses. We have also set out our views on long term support for those who invest in low carbon kit in their homes and we look forward to hearing your thoughts.”
The closing date for this consultation is 7 December 2012.
There is already cash available for renewable heat for householders under the Renewable Heat Premium Payment (RHPP) scheme, set to run until March 2013. The Department for Energy and Climate Change (DECC) has recently announced the winners of the RHPP Social Landlord Phase 2 ‘Top up’ competition and confirmed the list of community groups through to the next stage of the RHPP communities competition.
Renewable Heat Incentive for commercial, industrial and community customers
DECC has today published two consultations on expanding the RHI scheme for commercial, industrial and community customers to increase uptake of renewable heating kit in this sector.
The first consultation looks at the broader expansion of the scheme and closes on 7 December 2012. The second consultation focuses on air to water heat pumps and energy from waste and closes on 18 October 2012.
Key proposals to expand the scheme include:
- Inclusion of heating only Air to Air heat pumps with a proposed tariff of 0.97p/kWh for all sizes of installation
- Inclusion of Air to Water heat pumps with a proposed tariff of 1.7p/kWh for all sizes of installation
- Inclusion of biomass direct air heaters with a proposed tariff of 2.1p/kWh under 1MW and 1p/kWh over 1MW
- Extension of biogas combustion tariffs to installations over 200kW
- Introduction of a specific tariff for heat from biomass CHP of a proposed 4.1pkWh
- Introduction of bioliquid CHP tariff of 4.1p/kWh
- Increased tariff for deep geothermal installations from 3.4 p/kWh to 5p/kWh
- Increased range of waste feedstocks eligible for support
- Minimum energy efficiency requirements for district heating, commercial and industrial space and water heating
- Continuation of exclusion of reversible Air to Air heat pumps from the scheme
DECC will be running a number of events across the country to provide opportunities to ask questions about the consultations and feed in ideas. Further details on these events, including how to register, will be published on the DECC website shortly.