Estimated RHI payments on a solar thermal installation
Posted by Cathy Debenham on 23 July 2013 at 2:59 pm
Domestic hot water generated by solar thermal panels will be eligible for the renewable heat incentive (RHI) when it starts in spring next year. The tariff rate will be at least 19.2p/kWh of heat generated (although it may be a higher - we should find out in the autumn).
The RHI payments will be made on the solar thermal system's deemed contribution to water heating. This will be calculated by your MCS accredited installer using the method in the installer's standard MIS 3001. The deemed figure will be recorded on your MCS certificate.
The MCS solar thermal working group is currently updating MIS 3001, and is expected to make some significant changes to the way the total is calculated:
- Hot water demand is currently calculated on an assumption of how many people live in a house based on floor area. In future it is likely to be based on the actual number of people living there.
- The calculation will take allow for the fact that the summer efficiency of boilers is lower than the winter efficiency as they have to heat up just for hot water. For example an old (pre 1985) oil boiler is only 57% efficient in summer.
- In addition, instead of using the average solar irradiation in Sheffield, wherever you live, the new version of SAP (standard assessment procedure 2012) has location-based figures for solar irradiation.
The final details of the new standard have not yet been released, but the Solar Trade Association has published the following estimates of annual tariff payments (which will be paid for seven years):
Solar thermal: returns from the renewable heat incentive
Source: Solar Trade Association
Other assumptions: UK average irradiation, south facing, 30 degree roof pitch, no - or very little - shading, no electric showers in home, twin coil solar cylinder
NB: The seven year figure above is the total amount you should get over the whole period. Divide by seven for annual income.
NB2: Until the updated version of MIS3001 is published, there is a risk in relying on the above figures (it is expected to be finalised in October 2013).
Legacy solar thermal installations
People who install(ed) a solar thermal system between 15 July 2009 and the start of the RHI scheme in spring 2014 can also apply for renewable heat incentive payments as long as their system met the MCS standard that was current at the time of installation. The deemed heat for these applicants will be the energy saving estimate on the original MCS certificate.
Additional savings from a solar cylinder
Another little spoken about benefit from installing a solar thermal is the impact of installing a modern, well-insulated hot water cylinder. The Solar Trade Association (STA) used to this benefit to good effect in its arguments to persuade DECC to increase the tariff rate for solar thermal systems.
Using figures from the Energy Saving Trust's research into the efficiencies of condensing boilers, the STA has calculated that a modern, well insulated cylinder saves 750kWh per year, compared to the average one in the study. The new MCS standard will require insallers to ensure that all pipes and fittings are well-insulated (not just the solar ones, as has been the case to date).
Renewable heat premium payments still available
Grants of £600 to help with the upfront cost of a solar thermal installation are available until 31 March 2014. To access these payments you will have to install loft and cavity wall insulation where possible, and get a green deal assessment. The payment will be deducted from your renewable heat incentive payments over the 7-year life of the scheme.
This blog was updated to clarify the seven year figure in the table on 30 August 2013.
More information on solar thermal and the RHICathy Debenham
If you have a question about anything in the above blog, please ask it in the comments section below.
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