Solar thermal panels to heat your water just got more attractive with the launch of Good Energy's renewable heat incentive, or HotROC, contract. This means that customers who generate heat or hot water from renewable sources are paid for the energy they create. This is a first step towards putting those who generate renewable heat on a par with people who generate clean electricity. They have benefited through the government's Renewables Obligation for some years.

As a gas user, I am delighted that an energy company is taking the lead in providing a dual fuel tariff that promotes renewable energy use. Even better is the news that I can increase the return on my investment in solar panels, by signing up to their new renewable heat incentive.

It's not possible for Good Energy to supply renewable gas, as the gas grid isn't set up to deliver gas from anaerobic digestion or other renewable heat sources. Instead Good Energy will use money it makes from its gas customers to reward people who are reducing their use of fossil fuels by heating their water with solar panels. The more people who sign up for the gas and electricity tariff, the more people they can accept on the trial phase of the heat incentive project HotROCs.

Last year the Government announced plans for a feed-in tariff for generators of both electricity and heat. It is currently consulting on how that will work, and the feed-in tariff is expected to come into force in Spring 2010. So Good Energy is ahead of the game in its innovative plan to reward people who have invested in solar thermal panels. It hopes that the scheme will show leadership to Government on how it can meet its renewable heat targets. It will also campaign for renewable heat in the UK and for incentives to reduce gas use.

One of the challenges of a renewable heat incentive is how to calculate how much heat each customer has generated. Metering isn't easy, or cost effective. Good Energy has devised a system of 'deeming' instead. They use a number of factors, such as solar radiation where you live, the type of panel installed, their orientation, and the angle of roof to estimate your annual output. They pay 4.5p for every kWh generated - which works out at about £80- £85 a year on average.

Initially, the scheme is only open to those with solar thermal panels, but Good Energy hopes to extend it to include heat pumps, biomass and micro CHP. It is open to customers on the dual fuel tariff, and also to electricity customers who live off the gas grid. You can email to sign up either for the HotROCs scheme or to get gas from Good Energy or visit their website to find out more (click on How to go 100% green, then Good Energy gas and heat).

Unlike most other gas suppliers, Good Energy doesn't offer a tariff where the price decreases the more you use - as they don't want to incentivise people to use more. They charge 10.994p per day standing charge, and 4.279p per kWh unit charge. I haven't worked out yet how that compares with the totally different charging system I'm currently on. I suspect it's probably not going to be cheaper, but I'm happy to pay a bit over the odds to encourage more investment in renewables. I'll also be signing up for the HotROCs scheme, so if I'm accepted onto the trial phase I'll keep you updated about how it works out.

Photo by eye of einstein

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