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RHI makes some commercial solar hot water systems very attractive

Posted by Gabriel Wondrausch on 21 May 2012 at 9:39 am

Solar thermal was by far the most cost effective renewable energy technology on the market a few years ago. Since the government support schemes have been introduced, first for renewable electricity generating systems via the feed-in tariff and now through the renewable heat incentive (RHI) for non-domestic heat generating technologies, the question is, does solar thermal still stack up?

The short answer is that, in the right situation, it certainly does!

Getting the site right...

The first important thing to remember is that solar thermal systems are site specific. They are only suitable where there is a heat or hot water demand. Unlike solar PV, if there is no on-site demand then there is nowhere for the energy to go and you will not get any benefit from the system. The bigger the demand, the bigger the potential benefits from a solar thermal system. 

Phase one of the RHI (for non-domestic properties) requires the use of heat metering to determine the amount of energy units generated and where the energy is used. Ensuring systems are designed and working efficiently will be key to ensuring a good return on investment and a long lifespan.  If you can get the site and the design of a system correct, then the potential returns can be very attractive.

Typical sites that could benefit from a solar thermal system would include sports clubs, swimming pools, care homes, hospitals, dairy farms and or camp sites.

Getting the installation right....

The second thing to ensure is that the system is installed by a fully competent and Microgeneration Certification Scheme (MCS) accredited installer.  Solar thermal systems can be relatively complicated and simply won’t work unless they have been designed correctly.  I have seen far too many badly installed systems, many of which haven’t worked since they were installed.

For example, a typical dairy farm...

Most dairy farms have a high hot water demand and use electricity as their main source of fuel, making them particularly suitable for a large scale solar thermal system.

⋅ System size = 21m² (8 x flat plate solar thermal panels, 1 x 1,000ltr buffer store)

⋅ Approximate cost = £10,000 + VAT

For a typical dairy farm, the payback calculations for solar thermal system would look something like this...

RHI Payback Calculations:

Figures given are per year, and (in brackets) over 20 year lifetime of RHI:

Estimated energy generation: 6,858.1 kWh*  (137,162 kWh*)

Estimated income from the RHI @ current rate of 8.9p per unit, index linked: £610.37 (£12,207.42)

Estimated minimum savings on electricity bill (likely to rise as energy costs rise): £960.13 (£19,202.60)

Income + savings: £1,570.50 (£31,410.00) Estimated payback time = 6.4 years 

* Calculated using Polysun simulation software

Solar thermal systems are naturally well suited to the British climate.  They work well in cloudy conditions as well as sunny conditions, and are up to 95% efficient, making them one of the most efficient technologies available.  

They have been somewhat overlooked in recent years having been overtaken by other more glamorous technologies. However, with the introduction of the non-domestic RHI they are once again stepping back into the limelight.

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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5 comments - read them below or add one

Paul Hind (Secon)

Paul Hind (Secon)Comment left on: 29 June 2012 at 10:27 pm

If you are considering Solar Thermal and RHI for commercial use it makes perfect sense. One comment above states that solar thermal is unlikely to achieve the high temps required for dairy farms...used as a pre heat the savings are huge compared to the relatively low install costs and limited servicing required. We have supplied many systems to farms, laundries, commercial tank cleaners...the list of uses is endless.

The current thinking in the industry and government is not to use metering for domestic as the costs vs return are not worth it (meters start at £300 !)

Regarding meters....Ofgem are very particular when it comes to 'approved' meters...some are not all they are claimed to be. Be very careful where you buy them from...the claim for lost income on the instal rests with you.

I am pleased the mad PV rush is over...Solar Thermal is now proving its worth again...lovely free hot water...cowboys gone bust or legged it from the PV market...leaving the professional companies to pick up the pieces and show the public how it should be done. 

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Ian Smith

Ian SmithComment left on: 25 May 2012 at 8:30 am

In the dairy farm example, one site specific characteristic is the temperature that the water has to be heated to.  Water is used for washing out and sterilizing the milking parlour and, where further dairy processing operations are undertaken, this equipment as well.  Typically, this means that the temperature needs to be 85C to 90C.  At these temperatures, absorber efficiencies have fallen quite low so one is likely to use significant top-up, normally in the form of electric heating.

In looking at the economics, it therefore makes sense to consider the total annual cost of both the electricity and solar thermal components and compare this with other options such as biomass heating - which, for this application, would be eligible under the (non-domestic) RHI.  Biomass heating can be designed to achieve these temperatures so the only use of electrical heating would be for standby purposes during any boiler servicing or breakdown.

Ian Smith

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Cathy Debenham

Cathy DebenhamComment left on: 22 May 2012 at 1:24 pm

Hi Fred. The commercial RHI is up and running. The domestic RHI has been postponed. The details are due to be announced in September, and it probably won't launch until summer 2013.

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Fred1Comment left on: 22 May 2012 at 1:24 pm

Thanks for the info Gabriel, I thought the RIH was only going live later this year. How do the numbers stack up for a housholder I understand costs for a domestic installation are about £5,000 ?? what RHI payments would be payable and what savings would be achieved?





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Plumb Solar LTD

Plumb Solar LTDComment left on: 21 May 2012 at 12:55 pm

Excellent article Gabriel. Other good sites would be community centres and temples.

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