028 HPM 0415

HPM April 2015

WWW.HPMMAG.COM Got a story? Ring us on 01732 748041 or e-mail twood@unity-media.com INSIDEPLUMBCENTER Mixed impact for RHI during first year This month sees the first anniversary of the domestic Renewable Heat Incentive (RHI). Tim Pollard, Plumb Center’s head of sustainability, looks at its impact on the renewables market and considers what the future might hold... It’s now a year since the domestic Renewable Heat Incentive (RHI) launched and the progress made has been somewhat mixed. It has been very encouraging for some technologies though less effective for others. Biomass has boomed but Microgeneration Certification Scheme (MCS) installations of solar thermal and air source heat pumps (ASHPs) are down. MCS installations of biomass have seen a whopping 330% growth on last year. In fact, the biomass boom has been so great that the October 31 degression trigger of £4.2 million forecast expenditure was hit meaning the tariff was reduced by ten per cent to 10.98p/kWh as of January 1, 2015. The degression applied to applications submitted after January 1 which, of course, led to a massive spike in applications in December. However, this simply accelerated demand and the applications in January for biomass were ten times less. Now the Department of Energy and Climate Change has announced a further degression for the RHI biomass tariff, which kicked in on the first of this month from 10.98p/kWh to 8.93p/kWh. Undoubtedly, the ‘feeding frenzy’ which came after the last announcement of the January degression has been the major factor in exceeding the super trigger point and this next degression. For ASHPs and solar thermal, the uptake has not been so great with MCS installations of ASHPs showing a 17% dip and solar thermal falling 21% on last year. BIOMASS SUPPLIERS The result of this has been some noise from all those other than biomass suppliers moaning that the biomass tariff has been too generous and that their tariffs are too low. My view, however, is that it seems a huge shame to ‘punish’ the technology which has been the most popular choice for householders. The vast majority of accreditations have been for detached homes (58%) with the next category being bungalows (24%), semis (12%), terraced (five per cent) and flats (one per cent). Similarly, the applications are dominated by owner occupiers (89%) with only eight per cent from social landlords and a meagre two per cent from private landlords. Geographically, the areas leading the way are the south west with 18% of uptake and Scotland with 16%, followed by the south east (13%) and the east with 11%. Off-gas grid is the primary location, although there are some on gas installations where solar thermal is less sensitive In 2014, the number of MCS accredited Biomass has boomed but solar thermal and air source heat pumps installs are down since the RHI launched installers leaving the scheme in all technologies except biomass and exhaust air heat was higher than those joining. This may in itself prove to be a barrier to a greater take up of the other technologies covered by the domestic RHI. The decline has not been huge but we may rightly have expected growth rather than reduction. Many in the industry feel that there has not been enough publicity in regard to the scheme and that the general public remains largely ignorant of the opportunities, a view with which I have some sympathy. WHOLESALE GAS PRICES This coupled with the fact that oil prices have dropped and the big six energy companies have been pressurised to reduce their tariffs to reflect the drop in wholesale gas prices this winter may have given homeowners a false sense of fuel price security and reduced their concerns about the cost of heating their homes and, therefore, the desire to look for energy efficient alternatives. However, in my view, this is just a blip in the trend for fuel prices to escalate and homeowners will not be able to remain complacent about their fuel source as prices inevitably go up in the next few years. Householders will increasingly want to make the switch in order to cut their heating costs and also, hopefully, do their bit to cut carbon emissions. On a positive note, the increase in demand for renewables has accelerated the introduction of some interesting new product innovations, which will probably stimulate the market even more. From biomass boilers that can burn up to three fuel types simultaneously to brine water ground source heat pumps, all of which can be controlled remotely by laptop, tablet or smartphone, manufacturers are constantly evolving their products. Forward thinking installers who take advantage of growing consumer awareness and demand, continuing product developments and favourable market conditions will reap the rewards as the renewables choice becomes even more compelling. So overall the impact of the domestic RHI has been mixed since its launch last April. Hopefully, there will be a greater take up of some of the other RHI technologies going forward. Maybe if there is a successful conclusion to the current consultation the introduction of third party finance options will stimulate the market. Looking back, the Feed-in Tariff scheme took nearly 18 months to gain real traction so perhaps we should be a little patient about judging the success of the domestic RHI. 28 APRIL 2015 HEATING & PLUMBING MONTHLY enquiry number 122


HPM April 2015
To see the actual publication please follow the link above