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RHI delay ‘threatens future of ground-source heat pumps’

Ground-source heat pump companies have voiced their concerns following the announcement of delays in the domestic RHI scheme, which is likely to materialise in Spring 2014.

The government has also announced that it will be publishing the tariff levels for the domestic RHI scheme this summer, while the Renewable Heat Premium Payment (RHPP) will be extended until the end of March 2014 – it was originally due to finish at the end of this month.

Furthermore, the Department for Energy and Climate Change also plans to consult on increased non-domestic tariffs for some technologies within the RHI - it will be confirming which technologies will be included in the scheme this summer

However, the delay in the RHI scheme has been slammed by ground-source heat pump companies.

Rob Gardiner, managing director of Ground Source Heat Pump (GSHP) specialist Econic, part of Myriad CEG, said: “The Government’s Renewable Heat Incentive (RHI) has the ability to make the renewable heating sector take off – but significant skills and capacity to deliver schemes will be lost due to ongoing delays and lack of clarity”.

“Businesses within the industry need rapid action to stimulate growth within the renewable heating sector– some will not be able to sustain the cost base of skills necessary for the industry over a further period of delay.”

Mr Gardiner said that the delay will add obstacles to GSHC technology taking its place alongside other renewable heating and power technologies as a mainstream technology choice for new build and retrofit developments.

Mr Gardiner said: “First and foremost, the RHI phase 1 and phase 2 are fantastic opportunities to boost the installation of Ground Source Heating and Cooling systems and provide a genuinely efficient way of providing renewable heating and cooling.

“The main concern is that if the RHI is not promoted correctly and user-friendly for designers, installers and the end user, the industry will dwindle and there will be a huge opportunity missed.  This is a very real and present danger.

“There is a genuine concern within the sector that if RHI support doesn’t take hold this will happen and it would be massively damaging.

This sentiment was echoed by Simon Lomax, Managing Director, Kensa Engineering (a manufacturer of ground source heat pumps (GSHPs), based in the UK. Speaking at the Energy and Climate Change Committee, he said: “If we can’t improve our situation very quickly, than the GSHP market in this country will cease to exist. Three of the four largest installers have gone out of business in the last two years. The largest survives only via the generosity of its shareholders, its trading losses have been over £6.5 million in the last two years.”

“So, we are at a real risk here of losing a sector, that before the RHI was considered, was vibrant. It’s a horrid outcome. Kensa has been going for 13 years…  we have made money for 12 of those 13 years, we are very vulnerable, I say that in a public audience here, we are astonishingly vulnerable because there is no deployment in our market. “

DECC’s action plan features:

• A £9million package to help local authorities get heat network schemes up and running in towns and cities across the country, with a new Heat Networks Delivery Unit to sit within the Department of Energy and Climate Change (DECC) providing expert advice

• £1million for the cities of Manchester, Leeds, Newcastle, Sheffield and Nottingham to help them develop heat networks

• 100 green apprenticeships to be funded primarily for young people in small scale renewable technologies

• Up to £250,000 for a new first come first served voucher scheme for heating installers to get money off the cost of renewable heating kit installation training, with up to £500 or 75 per cent of the cost of the training course per person

• Plans for the government to work with individual industrial sectors to design long term pathways to cut carbon across UK industry.

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