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Heat pump suppliers react to RHI news

Air source heat pump suppliers have expressed disappointment at the news that there will be no Renewable Heat Incentive payment till at least October 2012

Air source heat pump suppliers, who comprised one of the largest sectors at last week’s Ecobuild show expressed disappointment at today’s news that the air source technology will not attract the RHI payment until at least the second ‘domestic’ phase of the scheme in 2012.

Installations of air source heat pumps will attract a one-off grant of £850 if both product and installer is MCS certified but there will be no payment back on the fuel bill in the RHI scheme announced today. The first phase of the scheme focuses mainly on non-dmoestic installations.

Sanyo European sales and marketing general manager Bob Cowlard said: “It is a major setback for the heat pump sector. Air to water is one of the easiest technologies to install and it is bound to restrict market development for the next year. Companies have made major investment in the technology and the news that it is thewhole air-to-water technology that has been dropped irrespective of product, is disappointing.”

Graham Hendra, md of Freedom Heat Pumps said. “I am disappointend that air-to-water has got nothing but not altogether surprised. The message is that all products will have to be MCS certified if people are to specify them, but it is difficult to see how heat pump installers will want to pay to join MCS at the moment if they are only getting the one-off payment with no incentive to give to their customers. I only hope there is better news with the Green Deal for homes next year.”

The cooling element of heat pumps will not be eligible for the RHI, only the metered heat output.

The government has decided that air source heat pumps need more work ‘to better understand the costs associated with the technology’ before they can be included in the Renewable Heat Incentive.

The Department for Energy and Climate Change added that air-to-air would also need more work: “For air source heat pumps, work is ongoing to develop a robust methodology for measuring heat delivered in the form of hot air. Subject to successful conclusion of this work and other factors (such as the role of cooling as opposed to heating in such systems) we intend to extend eligibility to this technology from 2012.”

Ground source heat pumps, by contrast will qualify as long as they can demonstrate a COP of 2.9. Heat pumps up to 45kWh will need to be MCS certified.

The RHI payment for these will be 4.3p per kWh for small installations under 100kWh and 3p per kWh for larger installations. The one-off installation payment is £1250 per unit.

Significantly, the RHI payments will be backdated to apply to any qualifying installation after 15 July 2009.

Owners of qualifying installations will have to apply to Ofgem demonstrating they meet the eligibility criterial to receive the staged RHI payments. Applicants can submit plans of a system yet to be installed.


Readers' comments (1)

  • As someone running a nationwide solar business, here are some comments.

    What a fiasco! That's my response to the half-heartedness of today’s announcement.

    Domestic solar was a huge let-down. I had hoped today's announcement would boost demand for solar heating products, just as has happened last year for solar PV when the Feed in Tariff (FIT) was announced. On first impressions, this boost looks unlikely.

    OK, is not stone dead. As a solar thermal supplier involved mainly with domestic customers, I would give it 2 marks out of 10.

    Also OK is the fact that backdating is reconfirmed. The Government has reaffirmed its commitment to honour access to RHI support for any installations after 15 July 2009. This makes sure that some early adopters do not lose out.

    Bad news about the RHI announcement predominates, however.

    Domestic consumers have to keep on waiting patiently. The domestic solar thermal market may remain quiet for another 6-18 months. Another missed solar summer. There are no clear ways of predicting system performance and not even any domestic subsidy rates given.

    By adopting a two-speed implementation, with business getting a head start, the announcement FAILS to include domestic users of renewable heat until 2012. This is a two year delay on its original plans. A full system of RHI payments will not be available to households until October 2012 with tariff rates to be consulted upon later this year.

    Is it good news at least for non-domestic solar themal customers? No. The tariff is a mere 8.5 p per kWh, which is 50% what was originally proposed. Installations costs have certainly not halved in this time, so what on earth has happened?

    Plus all solar thermal non-domestic systems will need to be metered. But metering adds about £300-£700 to the installation cost, uses electricity and costs money to administer and read. This low tariff and metering (instead of deeming) requirement of all non-domestic installations means that small solar installations of up to 5 solar collectors will be completely uneconomic. This is a kick in the teeth for small businesses which want solar thermal.

    Plus there is huge scope for performance fraud and for overclaiming? Performance fraud is built in to the system. Here’s how… Instead of the subsidy being based on (A – B) energy calculations, where A is the heat energy delivered and B is the electrical energy used to run pumps etc required to get the system to work, it is paid on A alone. DECC appear to have been astoundingly stupid in letting this blatant fraud go through. The taxpayer should ONLY be paying for net energy (Heat – Electrical) not gross heat energy! Millions of pounds will be now spent on subsidising energy which does not actually exist. How absurd!

    - Even the date on the DECC document is wrong (instead of 2011 it says 2010 – the year the RHI was SUPPOSED to start).

    I hope things can get better.

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