DECC reveals proposed tariff rates for domestic RHI scheme

By Katie Anderson on September 21st, 2012

It’s been awhile coming but the Department of Energy and Climate Change has finally announced its plans for the domestic side of the Renewable Heat Incentive (RHI) scheme, alongside proposed tariff rates for eligible renewable heating technologies. 

The scheme was first announced back in 2009 and the RHI support for commercial installations was the first to be introduced last November. The domestic RHI will support and encourage residential installations of solar thermal panels, biomass boilers and heat pumps and will operate in much the same way as the feed-in tariff (FiT) scheme does for solar photovoltaic panels.

While solar thermal will achieve 17.3p/kWh, air source heat pumps will generate a payment of 6.9-11.5p/kWh and ground source heat pumps 12.5-17.3p/kWh. Biomass boilers will receive support ranging from 5.2p/kWh to 8.7p/kWh. To be eligible for the tariff the technology must have been installed after 15 July 2009.

DECC has revealed that payments will be paid out over a seven year period, although the payment period is designed to pay for 20 years’ worth of heat generated.

Commenting on the proposals, Energy and Climate Change Minister Greg Barker said the UK must revolutionise the way its homes and businesses our heated, and move away from expensive fossil fuels, which will help cut carbon emissions and enable the UK to meet its renewables targets.

“Our proposals aim to encourage even more uptake of clean green heating in industry and in our businesses,” said Barker.

The renewable heat industry has welcomed yesterday’s announcement, believing it’s been a long time coming. However DECC has stressed that the tarifff rates published in the consultation are almost certain to change, as they “go through a period of refining, updating and verifying our evidence during the autumn including the incorporation of evidence that we gather from this consultation and the most up to date data from the RHPP scheme and other government calls for evidence.”

The Renewable Energy Association (REA) says the Government’s consultation into the RHI is a major step forward for the renewable heating scheme.

“Renewable heat has been the sleeping giant of UK renewable energy policy. Renewable heat technologies are often very cost-effective, and have a major role to play in reducing our carbon emissions, improving our energy security, and revitalising our economy,” said Paul Thompson, REA Head of Policy.

“We are delighted that the Government has published these proposals on time and we are looking forward to engaging further with DECC on the details to make the RHI work,” he added.

Commenting on the proposed rate for solar water heating, Paul Barwell from the Solar Trade Association said: “The tariff level proposed for solar thermal will concern many of our members, but following sustained lobbying from the STA, the door has been left open for flexibility on this support level. The STA will continue to press DECC to reflect the unique benefits of solar thermal in the final support level decision.”

DECC has revealed it is also looking into operating a budget management system with a trigger mechanism similar to the one employed for solar PV FiT payments, which it believes is necessary in order to protect the scheme’s budget if it is to keep running long term.

The consultation will close on 7 December 2012.


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