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Renewable heat incentive: important, but with dangers

Posted by Gabriel Wondrausch on 17 June 2010 at 1:03 pm

The uptake of renewable heat technologies has really dropped off with the renewable heat incentive (RHI) still looming, but no confirmation of the final tariffs or criteria, and the recent removal of the LCBP grants.

No doubt things will pick up once the RHI details have been announced there. However, based on the response to the feed-in tariff this has the potential to be very dangerous.

One risk is that the RHI could make it financially viable for people to install technologies that are unsuitable and badly designed, such as low temp heat pumps on houses with high heat losses. As the payments are to be deemed, some people will just not care whether they work as long as they are getting paid. 1000 badly installed inefficient systems is far worse than 100 well designed systems working efficiently with happy customers and low CO2 emissions.

The introduction of the feed-in tariff in April this year brought a lot of new and inexperienced entrants to the market. Throughout Europe there have also very serious cases of fraud relating to the exploitation of renewable energy tariffs.

Let us suppose, however, that the Department of Energy and Climate Change finds a way to manage, fund and implement a RHI that avoids these pitfalls. Why is it that solar thermal has been given such a low rate of return of 6% compared with the other technologies set at 12%?

The reason given is that solar thermal is already a well established and recognised technology. It has been an industry in this country for over 35 years and already offers cost effective savings without artificially inflated costs of the energy it produces.

With today’s ever rising energy prices promoting solar thermal is not difficult, but when every other technology get a higher assistance it makes one of the most promising and efficient renewable technologies less financially attractive.

If you think about it, there is no other technology that offers the CO2 savings and efficiencies that solar thermal does. Heat pumps require electricity to run, biomass requires a constant re-fuelling and cleaning cycle (even though the fuel can in some cases be carbon neutral, the process and transport is not going to be for some while) and PV is less efficient.

Don’t get me wrong, I am not against any of these technologies – in fact, far from it! A mix of technologies is what is required as most of them supply a different requirement. However, if the RHI is designed to reduce CO2 emissions and reduce fossil fuel reliance, why not encourage the use of the most cost effective and efficient tool we have available to us?

In Germany and Austria 50% of all solar thermal systems installed are now combined heating and hot water systems. I believe this is the way we will also go, with new build high efficiency housing. The details of the RHI will determine how long it takes for this to become the norm for the UK market as well. Let us hope that it truly is a renewable heat incentive.

photo by fedcomite

About the author: Gabriel Wondrausch is founder and director of SunGift Solar, which installs solar thermal and other renewable energy systems in the South West of England.

If you have a question about anything in the above blog, please ask it in the comments section below.

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