Is The Government Planning To Renege On Domestic RHI?

There is increasing concern that the UK government is to backtrack on initial Renewable Heating Incentive (RHI) promises for domestic installations. Many companies were developing hybrid PV technologies with the incoming RHI providing the enticement to investors.

An amendment to the draft legislation, if passed,  would leave homeowners eligible for money if their installation generates only heat from a renewable source. If the installation also generates renewable electricity, it won't qualify.

Renewable electricity generation is already encouraged under the Feed-in tariff (FIT) and the RHI is an equivalent incentive for heat. But in order to cash in on both schemes and reap the real benefits of your home's renewable potential, you'd have to install a separate unit for each incentive. This at a time when industry experts are placing more attention than ever on "˜hybrid' approaches to carbon reduction and sustainable energy generation.

Technology already exists, and, on the government's advice, has been certified under separate industry standards, that generates both electricity and heat from the sun. In fact, the government has reportedly awarded grants to the tune of £2m to companies developing this 'Photovoltaic Thermal' (PV-T) technology, and hundreds have already been installed in UK homes.

The efficiency gains of PV-T are widely celebrated as the installations do two jobs at once. British Gas has recently completed a successful 12-month assessment, with clearly demonstrable benefits of PV-T in domestic applications.

The UK is currently a global leader in the development of PV-T and its applications, and UK industry is involved in the biggest PV-T system planned on Earth. Our PV-T sector has been building up its European partners for export and has the potential to generate huge revenues into the UK, with the focus on British engineering excellence.

PV-T installations already qualify under the Commercial RHI, which was introduced in 2011, and businesses and industries are currently receiving money for heat generated by this technology. On the assumption that the same rules would apply to the delayed Domestic RHI (to launch this spring), homeowners have gone ahead and installed PV-T on the premise that it would generate two separate incomes: one under the Feed-in Tariff (for the renewable electricity it generates) and the other under the RHI (for the renewable heat produced).

However, this last-minute amendment to the Domestic RHI would mean that homeowners won't be afforded the same rights as those extended to industries and businesses under parallel legislation. DECC has offered the following explanation for the exclusion of PV-T from the Domestic RHI:

"˜The Government's policies on the Renewable Heat Incentive (RHI) and Feed in Tariffs (FiTs) are designed to encourage people to be more energy efficient and drive down carbon emissions. Solar PV-T is a relatively new technology. We consulted on the domestic RHI policy in September 2012 when there was little evidence available on this technology. We therefore decided that it should not be eligible at the launch of the RHI scheme.

If those who install measures through RHI were also paid a FiT, the Government may be paying them twice which would represent over-compensation and poor value for money for the tax payer. The Government will consider the appropriate level of support while examining the case for new technologies.'

Benefiting from both FIT and RHI cannot be seen as double counting; for every 1,000 watts of the sun's energy, approximately 15% is used for the production of electricity while a further 55-65% is converted into heat. This effectively means PV-T converts up to 80% of the sun's power into useful heat or electricity, displacing more CO2 per square metre than any other solar technology. Simply put, solar energy is not being used twice - it is being used for the production of either electricity or heat.

Jeremy Leggett, Founder and Chairman, Solarcentury, said, "˜This is yet another barrier erected by DECC for those trying to innovate in the green industrial revolution that Coalition ministers championed so enthusiastically while in opposition. What a contrast to the bend-over-backwards policy approach shale frackers and nuclear benefit from.'

PV-T is an example of the hybrid approach that's crucial if the UK is to meet its target of achieving 15% of its energy from renewable sources by 2020. The fact that PV-T has already been embraced in the Commercial RHI would suggest the government already views the technology as a viable method for the production of both heat and electricity.

In a letter to Natural Technology Developments Ltd., a UK company involved in the design and deployment of PV-T, Greg Barker, Energy and Climate Change Minister, stated, "˜We consider PV-T to be a new technology that can potentially offer the benefits of dual generation of heat and electricity in a cost-effective way. Being a new technology, we need to ascertain whether, for the purposes of the domestic RHI, it meets our eligibility criteria"¦

"˜The responses we received to [the public consultation in September, 2012], together with low deployment levels to date, offered little evidence to satisfy us that PV-T currently meets those criteria. In particular, the need for a technology to be fully proven, commercially available and able to make a significant contribution to the deployment of renewable heat at cost effective levels at a domestic scale.'

However, this "˜new technology' has actually been in existence since the late 1970s, and has been commercially available in the UK for approximately 10 years. As with any technology there are both incremental and step change innovations taking place that lead to better performance, greater value for money and accessibility for end users.

In response, Jo Walters, Director, Natural Technology Developments Ltd., questions whether there has been due process; the 2012 consultation did not list PV-T as a technology to be excluded in the Domestic RHI "“ and the consultation document does not consult upon an exclusion of solar thermal panels that also generate electricity.

As yet there has been no explanation for the government's U-turn and no justification for why PV-T is deemed sufficiently "˜proven' for the Commercial RHI, but not for the Domestic RHI. Indeed, roughly 90% of the PV-T installations to date are in fact domestic, so the track record here is stronger than anywhere.

The legislation will be discussed by committee before passing to the House of Lords. This may be the last opportunity to raise concerns regarding the government's omission of PV-T and the potential impacts on business, jobs, consumers and a secure energy future.