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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 RHI

YouGen guide to solar thermal

YouGen guide to the domestic renewable heat incentive and FAQs

7 things to check before you install solar water heating panels

10 tips for avoiding the solar cowboys

Solar thermal: a guide to maintenance and life expectancy

Photo Credit: London Permaculture via Compfight cc

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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

11 comments - read them below or add one

Cathy Debenham

Cathy DebenhamComment left on: 15 December 2014 at 11:51 am

Hi John Is it solar thermal panels, or a thermodynamic system? And is the product itself MCS accredited? Both installer and product must be to receive the RHI.

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john newbound

john newboundComment left on: 12 December 2014 at 11:45 pm

I have a Thermalenergie water heating system installed by microgeneration certified registered installers ( now gone bust) in Nov 2012. This has produced hot water for 2 years without any back up from my Combi. I qualify as a Legacy applicant yet Ofgem say the system is not acceptable???? and declined my application RHI. I have an MCS certificate a Green deal certificate and an energy certificate.   

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Cathy Debenham

Cathy DebenhamComment left on: 7 October 2013 at 11:56 am

@monflyer58 I think that's there's general agreement that it's a good idea to get solar thermal systems  serviced every now and then. How often is what's up for discussion. It depends on how much you want to do the little checks to ensure everything's functioning OK, versus how much you want the peace of mind of a professional service. Read this blog for 7 DIY steps for servicing your solar thermal.

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monflyer58

monflyer58Comment left on: 6 October 2013 at 10:52 am

Some installers are saying systems need to be serviced every two years, at a cost of £150 - 200  a service.  This will make suignificant inroads into your RHI payments, and to my mind makes solar themal dead in the water, from a financial point of view.  Are such charges/ servicing really nececssary or are they a just a rip off from shady installers ?  

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Cathy Debenham

Cathy DebenhamComment left on: 30 August 2013 at 10:19 am

Hi Neesha - you are right, the figure is for the total income over the seven year period. I have added a sentence in the blog to clarify that is the case.

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neesha64

neesha64Comment left on: 27 August 2013 at 9:48 pm

Hello,

I think the Solar Trade table is possibly a bit misleading - presumably unintentionally.  I first took the payments in the "7 Year Tariff Payments" column to be annual payments (the preceding paragraph suggests this interpretation).  Having done a little calculation, as the returns were much better than I was expecting, I see that the cash figures represent  the payback over a total of seven years. 

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Cathy Debenham

Cathy DebenhamComment left on: 24 July 2013 at 12:22 pm

Hi AlyBee I'm afraid that anyone (except a self-builder) who wants to claim RHI will have to install loft and cavity wall insulation if appropriate and have a green deal assessment. Unless they want to finance the former with the latter it's best to do it in that order, otherwise they will have to get a second EPC to prove they've got the insulation.

@nibeboilerprobs if you have solar thermal with a heat pump it with a biomass boiler you can claim rhi for both. This is because heat pumps and biass boilers are less efficient when just heating water and DECC wants to encourage their use in combination with solar thermal. 

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nibeboilerprobs

nibeboilerprobsComment left on: 24 July 2013 at 9:58 am

Hello Cathy. It had been suggested that you can also claim multiple rhi payments on one property/home ,ie, with your heat pump and solar thermal, so getting two lots of rhi payments for producing. Is this true?

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AlyBee13

AlyBee13Comment left on: 23 July 2013 at 6:02 pm

What's the score on needing Green Deal Assessments for RHI on retrospective installations done seveal years ago. I'm hearing vibes that you'll still need a GDA. Our community helped hundreds of people fit STH, and the last thing we need is to go back through an audit process with them.

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John Connett

John ConnettComment left on: 23 July 2013 at 4:28 pm

I have a legacy solar thermal system with around 4 square metres of flat plate collectors indirectly connected to a 350 litre thermal store. DHW is provided at mains pressure via a plate heat exchanger. In spring and autumn surplus heat can be used to assist with space heating via radiators. Anybody know how this will be treated for Domestic RHI?

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Cathy Debenham

Cathy DebenhamComment left on: 23 July 2013 at 4:04 pm

Hi John as outlined above in the section headed legacy solar thermal installations the deemed hot water load will be taken from your MCS certificate. Then multiply that by the tariff rate to get the annual payments.

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