Industry responds to the RHI scheme reforms

Industry responds to the RHI scheme reforms

With the Government having released its planned reforms to the Renewable Heat Incentive (RHI) scheme recently, there has been plenty of positive reaction from manufacturers and industry bodies to the announcements – as detailed below.

In the overview of the reforms, the Government outlined its aim to improve the scheme so that it; focusses on long-term decarbonisation, offers better value for money and protects consumers, and supports supply chain growth and challenges the market to deliver.

To read the full consultation, click here.

The Heat Pump Association (HPA) broadly welcomes the release of the Government’s intended reforms to the Renewable Heat Incentive scheme in spring 2017.

Mike Nankivell, President of the HPA, said: “Considering there was a genuine risk to the continuance of the RHI scheme due to Brexit, Government changes and the state of the economy, this has to be seen as a largely positive outcome.

“We are pleased to see that Mandatory Heat Metering will not be introduced and feel the three papers we presented to DECC/BEIS outlining reasons why this should not be introduced and what could replace the proposal had a very large impact. The tariff increase for ASHP (10.02 p/kwh) will help to counterbalance the new total gross heat demand limit of 20,000, with the result that any application under 26,700 kWh will be better off under the new scheme.

Mike continued: “We are pleased to see that our hard work over two years, discussing the possibility of tariff guarantees for larger projects in the Non-Domestic RHI scheme has also been rewarded. We also welcome the limit for GSHP set at above 100kWt since we were at the forefront of advocating that the GSHP threshold should be reduced from the 500kW and above limit.”

Mike also noted that the observations made on the potential of heat pump technology were particularly encouraging.

Managing Director, Simon Lomax, said: “Kensa welcomes the proposed refinements to the RHI and trusts they will quickly receive parliamentary approval.

“It is encouraging that Government has confirmed its belief that ground source heat pumps are a strategically important technology and have offered more attractive support, particularly for residential properties served by shared ground loops, a concept that has been pioneered by Kensa in the UK.”

Nancy Jonsson, Commercial Director for Heating and Renewables at Daikin, commented: “The Government response to the consultation on the domestic Renewable Heat Incentive is a positive development for the renewable heating sector and Daikin UK welcomes the reforms.

“The tariffs for air-source heat pumps have been increased by 35.8% from the previous level of 7.51p/kWh to 10.02p/kWh, with the tariff for ground-source heat pumps increasing by 1.1%.

“This increase in the domestic RHI tariff rate for air-source and ground-source heat pumps is a clear endorsement of the innovative technology. It is evident that the Government has recognised the vital role that heat pumps can play in reducing the UK’s carbon output, meeting the UK’s renewable energy target, and reducing fuel poverty – placing heat pumps at the centre of its energy strategy.”

Alongside increases in tariff rates, the Government is enforcing a clearer directive on heat pump metering and a cap on annual payments made with regards a single property. Nancy noted the importance of such directives, and concluded: “As the reforms made by the Government settle, we can look forward to the positive impact that the inevitable increase in the installation of heat pumps will have across the domestic heating sector. Ultimately, this will deliver cleaner, more efficient, cost effective and renewable heating nationwide.”

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