After several months of consultation about removing new solar thermal systems from the Renewable Heat Incentive (RHI) starting in 2017, the British government announced on 14 December 2016 that the support will in fact continue. The government published the results of the consultation in a document called The Renewable Heat Incentive: A Reformed Scheme (see attached pdf). Here it was announced that support for new solar thermal installations will in fact continue through the RHI scheme without changes. Hence the tariff for the households will remain at the current level of 0.1974 Pound Sterling (GBP)/kWh paid over seven years and for non-households the tariff will remain at the current level of 0.1028 GBP/kWh over 20 years. Solar space heating is still not eligible. The chart shows the small portion of solar thermal accredited installations (1.57 %) in the non-domestic RHI between Q2 2014 and Q3 2016 – in total 223 solar applications since the start of the programme.
Since the win at the general election May 2015, the UK Conservative Party has made significant changes to policies that were related to energy and environment protection. These include the currently in parliament discussed reduction of subsidies for wind and solar PV with the Feed-In tariffs and the reduction of the renewable quote for electricity suppliers, that are stipulated to source an increasing proportion of electricity from renewable sources. Also the climate change levy (CCL) exemption from renewable electricity schemes has been removed and the Green Deal and ‘zero carbon’ homes initiatives have been abandoned. These cuts were justified by the Department of Energy and Climate Change (DECC) who announced these would be “….Reducing energy bills for hard working British families and businesses and meeting climate goals in the most cost effective way ….. ”
“The Renewable Heat Incentive in the United Kingdom has failed to stimulate the market for solar thermal, which continues to contract. There are technical issues in the regulations preventing the use of solar thermal with other renewable heating systems, such as biomass and heat pumps, and the subsidy rate is relatively low compared to the feed-in tariff for solar photovoltaics.” This clear statement was made by Dr Robert Edwards, Director in the Science and Innovation Group at the Department of Energy and Climate Change (DECC). He represents the country in the Executive Committee of the IEA Solar Heating and Cooling (SHC) research programme and delivered an updated country profile of the British solar thermal market in June 2015. As part of its services, the IEA SHC programme publishes updated market profiles of all 20 member countries each year. You will find the list of member countries online and the link to the country profile at the bottom of each country page. The statement by Edwards is part of the latest UK country profile.
The UK has two Renewable Heat Incentives (RHI) that assist solar thermal. The non-domestic variant (non-dRHI) has operated since November 2011. The variant for households (dRHI) has operated since April 2014. Whereas the share of solar thermal applications within the non-DRHI is still low with 3 % (left chart), every fifth new domestic renewable heating system contains a solar water heater (right chart). For solar thermal, the non-dRHI currently pays 0.10 GBP/kWh for 20 years and the dRHI currently pays the end-user tariff at a rate of 0.192 Pound Sterling (GBP)/kWh for 7 years. Both rates will be annually adjusted for inflation through the payment period. The pie charts show the numbers of accreditations of non-dRHI and dRHI technologies.
Source: Gas and Electricity Markets Authority (Ofgem)
The domestic Renewable Heating Incentive (dRHI) for England, Wales and Scotland has been launched on 9 April 2014. For solar thermal, the dRHI will pay the end-user tariff at a rate of 0.192 Pound Sterling (GBP)/kWh for 7 years. The existing non-domestic RHI scheme continues at a new rate adjusted for inflation of 0.094 GBP/kWh for 20 years. The dRHI applies to biomass boilers & stoves, ground-source & air-source heat pumps heating and solar thermal DHW for single homes. The subsidy is for properties capable of getting a domestic Energy Performance Certificate (EPC) which confirms the property is a domestic dwelling. The recipient of the subsidy is the owner of the heating system. So this can be the person owning and living in the home, a private landlord or a registered social landlord. In general it is not applicable to a new home unless this has been self-built. Other requirements are that the property should also have a Green Deal Assessment (GDA) and where the GDA recommends installing loft and cavity wall insulation, these must first be fitted before applying for the dRHI. New self-built house can be exempt from the GDA requirement, as these will be assumed to have adequate building insulation. There are initial costs to the user to first obtain the EPC and GDA. (Find more information in the database of incentive programmes.)
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
For over a year, the UK government has been heavily promoting the Renewable Heat Incentive (RHI). But by end of August 2012, only a tiny amount has been paid out for solar thermal: just Great Britain Pound (GBP) 60 (approx EUR 70). So why is solar thermal badly lagging in the UK’s flagship incentive for renewable heat?
Five months after the introduction of the Renewable Heating Incentive for commercial installations, the scheme’s effect on the solar thermal sector is almost zero. Of the 21 renewable heating systems approved by the end of April 2012, 16 are solid biomass boilers, 4 heat pump projects – and only one is a solar thermal system. The same imbalance can be found across all of the applications submitted to the RHI authorities. There are only 7 solar thermal projects among the 485 sent-in papers, the RHI helpline of Ofgem, UK’s electricity and gas regulator, confirmed at the beginning of May. Ofgem is in charge of paying the feed-in tariff to the owners of renewable heating systems. 80 % to 90 % of the submitted projects are based on biomass. The remaining projects all include a heat pump solution. Source: Ofgem
On 10th March 2011 the UK’s Department for Energy and Climate Change (DECC) published details of their Renewable Heat Incentive (RHI) scheme. This will launch on 29th July 2011 (see press release). The RHI aims to help the UK achieve a target of 12% of total heat consumption coming from renewable energy sources by 2020. It is predicted over the next decade that this initiative will reduce carbon emissions by 44 million tonnes, although this depends on which fuels are displaced.
A recent survey of UK Solar Trade Association (STA) members has concluded that solar thermal business has dropped dramatically over the last 3 months. Since the arrival of the new UK Coalition Government, the survey found that almost 50% of solar thermal installers are reporting a 75% or greater reduction in business. New jobs are also being affected, with 65% of members considering temporarily leaving the solar thermal sector and 7% leaving permanently (find the full report attached).