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Great Britain: RHI Delays Blamed for 35% Drop Solar Thermal Sales

Submitted by Baerbel Epp on May 8, 2013

Quarterly solar thermal statistics from the UK’s Solar Trade Association (STA) covering 80 % of the total market volume show that solar thermal sales have decreased by 35% in the first quarter of 2013 when measured against the same period in 2012 (see chart on the left and attached document). This news comes at the same time as the UK Government, in updating their heat strategy, announces further delays to making the Renewable Heat Incentive (RHI) eligible for householders: the so-called ‘Phase 2’ of the RHI scheme. This is now the second delay to the roll-out of Phase 2. When the RHI was first launched, the scheme was supposedly going to be made available to domestic customers in October 2012. However, in their factsheet published on 24 October 2012, the Department of Energy & Climate Change (DECC) stated their intention to introduce the domestic RHI “in the summer of 2013”. But then on 26 March this year DECC released a press release that the launch of this scheme will now be pushed back once more until spring 2014: a full 18 months later than originally promised. DECC now state that further confirmation and proposed tariff levels will be published later this year. In the meantime, the Renewable Heat Premium Payment (RHPP) scheme is to be extended until the end of March 2014.
Figure: Solar Trade Assocation

This delay comes despite further assertions from Energy and Climate Change Minister Greg Barker of a strong commitment to introducing an incentive scheme for householders, and his statement that the RHI “is a key part of our approach to cutting carbon and driving forward the move to more sustainable low carbon heating alternatives”.

The STA has since launched a “TweetforHeat” media campaign encouraging people to tweet about their frustration with the latest delay. The project, which renewable energy company Riomay called a “Grass-Roots Mini Twitter Campaign for Domestic Scale Renewable Heat”, aimed to draw Greg Barker’s attention to an article published on Solarblogger on 20 April 2013 written by Stuart Elmes, Chair of the STA Thermal Working Group. Elmes reprimanded DECC for reducing consumers’ confidence in the solar thermal market. On 29 April, Greg Barker responded with the following Tweet: “RHI ideas, giving all serious consideration. Further positive news coming shortly”. The campaign reached prominence despite potential confusion over the use of the “TweetForHeat” tag, which was initially employed to promote an unrelated US campaign called “Heat For the Holidays” seeking donations for people unable to afford their heating bills.

However, only a very small percentage of systems benefiting from the RHI are solar thermal. The Office of Gas and Electricity Markets’ (OFGEM’s) quarterly report for January-March 2013 (see attached document) showed that a total of 1,238 installations were accredited by 31 March 2013. However, 92% of these installations were biomass, with just 3.9% of the accredited systems using solar thermal (48 applications).

Source: Quarterly report of OFGEM (see attached document)

Many in the industry feel that the Government’s approach to renewable incentive schemes has followed a ‘withered carrot’ model, which is a term that is used when a potential reward has been presented and withdrawn so many times that it has become undesirable. Regarding the UK solar thermal situation, there is the sense that grants have been dangled in front of customers, but often held tantalisingly out of reach. This has led to a vision of renewable technologies as only viable when incentivised, rather than appealing for other reasons such as the desire to gain control of heating bills or the need to reduce CO2 emissions.

This is the case made by Rik Whines, Solar Thermal Technical Sales at solar thermal system supplier Solfex Ltd., who commented that: “A lot of the people I speak to, when I ask them how they’re doing with their solar thermal installations, say that solar thermal is dead. When I ask them why, they say ‘because our customers are waiting for the RHI’.” Whines added: “Of course I think the PV Feed-in Tariff (FiT) has messed the whole situation up, because it’s led customers to believe that in order to make solar viable they have to gain a grant-based payback.” But this is not necessarily the case. Solfex has great success in offering customers calculations about savings on traditional heating costs. “We’re pushing the message that they’ll still get so many free showers and free baths by investing in solar thermal, and also showing the amount of CO2 emissions that these systems will save,” explains Whines. “Also, our recent integration with the Travis Perkins Group (a nationwide chain of builders’ merchants) has helped significantly.”

Richard Simon, Director of the solar thermal system supplier Solarsense, added that: “We’re disappointed in the recent news that the RHI is being delayed again for homeowners, but as we’ve been telling customers at least it’s good news that the RHPP has been extended in its place for another year.” Solarsense has been finding that the offer of money back for solar thermal has been an incentive for people to go ahead. Simon concluded: “However, we have definitely had customers who’ve been holding off investing in the technology until the RHI is launched for the domestic sector, so the sooner it’s quantified and implemented the better”.

This news is written by Chris Laughton, founder and Managing Director of the Solar Design Company in Great Britain.

More information:
Renewable Heat Premium Payment: http://www.energysavingtrust.org.uk/
http://www.decc.gov.uk
www.ofgem.uk
www.ofgem.gov.uk
News on solarblogger: http://www.solarblogger.net/2013/04/you-just-couldnt-make-this-up.html

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