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Delivering the Renewable Heat Incentive - speech to Westminster Forum

Posted by Cathy Debenham on 15 November 2012 at 9:44 am

This is my speech to the Westminster Energy, Environment and Transport Forum seminar on Delivering the Renewable Heat Incentive: controlling costs suppporting new technologies and moving towards the domestic roll out on Tuesday 13 November 2012.

YouGen is a information website for home and small business owners. We try to provide the answers to the very practical things people want to know before they talk to an installer.

Having been dominated by solar PV until recently, our visitor statistics indicate that people are increasingly interested in renewable heat. There are now more visitors to both the heap pump and biomass boiler pages, than to Solar PV.

In preparing for this talk I asked our newsletter readers what they would like me to say to you today. I got a rush of emails – but no consistent message. Instead their responses were an eloquent illustration that there is confusion and ignorance, and that consumer confidence is pretty low. And these people are the low hanging fruit – the ones who are interested enough to sign up to receive a renewable energy newsletter.

There are lots of things I could mention about the RHI (renewable heat incentive) proposals, but I've chosen to focus on consumer confidence which is the one I am most concerned about. At this stage of a new market it is fundamental to the successful adoption of renewable heat technologies.

I talk with a lot of early adopters of renewable energy, and have heard a lot of horror stories around installations of renewable heat. Problems are especially likely if people are combining two technologies.Just last night I got an email from someone who had a ground source heat pump installed earlier this year, asking for advice as it hadn't performed right ever since. The stories I hear are not dissimilar from the findings of the energy saving trust’s field trials for heat pumps and solar thermal. Both identified plenty of room for improvement. While early adopters tend to accept the risks involved in being a pioneer, it’s not going to work for the mass market.

Those early adopters are unlikely to take their stories to the Daily Mail. People who have been mis-sold a heat pump system, and end up with huge electricity bill, or no hot water, will. If too many of them do it, the renewable heat market risks crumbling before it even gets off the ground.

What we need is quality installations, and happy customers telling positive stories. This will lead to confidence, and from confidence comes investment. Last week I met a farmer who had just installed a biomass boiler, to replace oil. He said: "It's the first time in the history of our house that we've been warm. Last year we were scraping ice off the inside of the windows." These are the kind of stories we need to hear.

I am encouraged by the fact that the domestic RHI is a boiler replacement scheme, rather than a  Feed-in tariff style scheme offering a big return on investment. I think it’s in everyone’s interest for the shift to renewable heat to build steadily, rather than explode FIT-like. This will extend the period of learning that’s happening with the renewable heat premium payments. Hopefully the lower return will also deter the cowboy element from entering the market.

Some of the challenges I see are:

  • Confusion and ignorance among the public
  • Not a high enough skill level – especially in system design – among installers
  • Installers who aren’t good at educating their customers and communicating how to get the best out of a system

I also worry about the emphasis among installers on selling on price, and a lack of understanding of value and how to communicate that to a customer. In solar PV this has led to a race to the bottom. Retrofitting renewable heat technologies is much more complicated and disruptive for the customer, and often needs the householder to manage the system differently to what they are used to to get the best out of it. The Daily Mail danger is much greater.

So what can we do about it?

I see two key areas for industry: installer training should include substantive sections on system design, and also on how to communicate with customers: both about value, and about how to use the controls and how to get the best out of the system.

More installers could take a lesson from supermarkets that have value, mid and premium ranges and offer consumers a choice to fit their needs, rather than coming along offering one option, take it of leave it.

However, for consumers I think the education needs are greater. This whole transition to energy efficiency and renewable heat is so important that it needs a concerted education programme. Relying on industry, which after all has a product to sell, is not enough. I join the Green Alliance and others in calling for a government-supported education programme along the lines of the successful one for digital switchover.

This will also help lessen the dangers of cowboys jumping into the market and mis-selling. One of the respondents to my newsletter request for information said “I regret the RHI announcement hasn’t reached me, and I haven’t had the spate of ads from cold callers to advertise the fact either”. Do we really want the first bit of information about renewable heat a householder receives to come from a (pushy) salesperson asking "have you taken up your government incentive for a heat pump yet?"?

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

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Comments

8 comments - read them below or add one

Cathy Debenham

Cathy DebenhamComment left on: 6 June 2013 at 8:25 am

Hi Peter - sorry I missed your comment when first posted, and have just read it. I entirely agree with you that a survey of the property is a pre requisite for quoting on a heat pump. They are not suitable for every situation, and buyers should be made aware of that. In my view, a reputable installer would want to see the property, and do appropriate calculations, before quoting. 

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Peter Rees

Peter ReesComment left on: 25 January 2013 at 12:40 pm

My experiences are with ICE Energy who claim to be the main suppier for heat pumps in the UK and my comments are directed at technical sales.

My first approach to IceEnergy was aimed at installing a ground HSP. I submitted drawings of my house (detailing insulation levels) and a garden plan (to establish if there was sufficient space). The project seemed feasible and a quote was given to me. On this basis I attended a one day free course they offer (I planned to do the instalation myself) which involved a night in a hotel. I arranged to meet their technical sales following the course. In preparation I had drawn a garden layout for the collectors which showed that their criteria for instation could not be met (given to them prior to the meeting and giving my concerns). The collectors could be squeezed in but with some comprimise of their recommmendations. Only at this meeting did they acknowledge that I didn't have the space for a Ground HSP.

I was re-directed to installing an Air HSP which they quoted for. The efficiency was only 2/3s of a ground HSP but they estimated it could save me up to £300 per year (this wasn't guaranteed and I wouldn't expect one). Equipment and commissioning came in at approx £10K and their guess at the RHI grant was £1800 payable for 20 years. On this basis I made a deposit but with the very clear condition of opting out and a full refund in the event of the HRI grant not being reallised or being delayed.

I understand now that the grants have not been finalised but have been provisionly posted. For my system/house this is indicated to be £1800 per year for 7 years. This is about 35% of the earlier forcast. I have been waiting for the grant to be finallised but have now decided to abandon the project and get my deposit back.

This decision is principally because of the grants but also because my research suggests that savings are only likely to be in the region of £100 per year and that an AIR HSP is not best suited to replace a gas boiler.

My experience seems very in line with the comments in your speech.  Ice Energy were were very quick to sell me a system but did little or no verification of the suitablity of my property. I have no doubt it would have come to light at some stage but this could have been after deliver of the equipment. The whole purpose of giving the scale drawings (my first communication) was to identitfy this.

Your speech goes on to comment about building confidence in this industry. My thoughts here are that every house is unique and that the first thing that must be done is a survey of the house itself. I know this is available for basic insulation and enery suveys are required when selling houses but I believe these could be rolled out further - with more detail and more recommendations. These surveys could also include the suitability of the property for Renewable Energy and could be made a pre-requisite for the companies selling these products.

I hope this has been of interest to you.

Peter

 

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Cathy Debenham

Cathy DebenhamComment left on: 29 November 2012 at 5:05 pm

Dougal - the indicative rates for domestic RHI are here. To get the annual income you multiply your heat load (this will be deemed - probably using RdSAP - your installer has probably already done an estimate) by the tariff rate. For total income, multiply that by seven. It's not as generous as the commercial RHI, but it's still worth having. We'll know the final rates in spring next year.

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dougalj

dougaljComment left on: 29 November 2012 at 5:00 pm

We invested about £10k in a high-temp Deakin Air Heat pump system, which was easily retrofitted to our old oil-fired CH system.  Both space heating and water heating work very well, but the electricity consumption is pretty high, though still cheaper than oil.  I won't know what a full year looks like till April.  What I wanted to point out was that we were led to believe that there would be quite a significant payback in terms of an ongoing RHI.  I accept that we took a risk on this, but I hope we will actually get a decent return eventually - we didn't fit the system to save money but to put our money where our mouths are, so to speak, but all the same...

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Cathy Debenham

Cathy DebenhamComment left on: 29 November 2012 at 2:13 pm

I was asked if I wanted to be involved in some mapping of customer journeys in the RHI, so that's pretty positive.

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muymalestado

muymalestadoComment left on: 29 November 2012 at 1:07 pm

After that clear analysis of your own audience what feedback do you get that someone, somwhere, Westminster would be a good place to start, will take your interpretation to heart and design government programmes to meet the challenges this new market presents?

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Cathy Debenham

Cathy DebenhamComment left on: 16 November 2012 at 9:09 am

Ecoliving - I completely agree. This should be a starting point for all discussions.

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Ecoliving Ltd

Ecoliving LtdComment left on: 15 November 2012 at 9:44 pm

In our experience it is so important to understand the customer's specific expectations of a renewable heat system so these can be met and hopefully exceeded!

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