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.
The previously reported rumours of significant changes for solar thermal support in the UK have now been confirmed by the government in a consultation proposal on 3 March. Already we knew the Renewable Heat Incentive (RHI) in Northern Ireland is suspended to all new renewable technologies. We now also know for new solar thermal systems in the rest of the UK that RHI support is proposed to be removed in 2017. This is for both RHI schemes domestic and non-domestic. The details have been released under the consultation document ‘The Renewable Heat Incentive: A reformed and refocused scheme’ (see attached pdf). The industry can comment to this consultation before the 27th April 2016. Already on the same day the Solar Trade Association (STA) published a protest note titled: British manufacturers and social housing providers join call for urgent rethink.
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 UK Renewable Heating Incentive (RHI) for Households, including assistance for solar thermal, has been announced since 2010 despite the non-household version being launched late in 2011. Positive signs indicate this will now be ready before summer 2014, as the UK government recently passed the relevant draft statutory instrument. This is the result of the consultation process which start in September 2013 based on a proposal of Department of Energy & Climate Change (DECC).
For almost a year now, the UK government has been recording statistics on all the subsidised renewable heating and electricity installations. It is now possible to compare the success of the subsidies for different technologies using the peak power rating. The chart shows the cumulative peak power for non-household projects within the Renewable Heat Incentive (RHI). Solar thermal has had a poor performance with only 1 MW installed capacity since 2010, which represents less than 1 % of all RHI-subsidised renewable heat installations. This is no surprise because the number of UK sales by square metre of collector area has been in decline since mid-2011.
Source: Department of Energy & Climate Change (DECC)
In July 2013 the UK’s Department of Energy & Climate Change (DECC) confirmed the tariff rates for the long-awaited Renewable Heat Incentive (RHI). The Government’s press release at 12 July 2013 promises that the solar thermal tariff will be set at ‘at least 19.2 Pound Stirling pence (p)/kWh’. This compares with 7.3 p/kWh for air source heat pumps, 12.2 p/kWh for biomass boilers and 18.8 p/kWh for ground source heat pumps.
In March 2013, the UK Government came under criticism for their updated heat strategy when they announced further delays to the Renewable Heat Incentive (RHI) being made applicable to householders. As a stop-gap, it was announced in parallel to extend the householder’s Renewable Heat Premium Payment (RHPP) scheme for another year. In summary, much of the uncertainty about these schemes has been blamed for a 35% drop in UK solar thermal sales. Since then, better news has been offered by the UK Department of Energy & Climate Change (DECC).
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
On 20th September 2012 the UK Government opened a consultation on their plans to expand the current non-domestic Renewable Heat Incentive scheme (RHI) to include the domestic sector. This intends that four core renewable heating technologies will be eligible for the domestic RHI: solar thermal, air source heat pumps, ground source heat pumps and biomass boilers. Although the proposal document gives some pieces of good news for solar thermal, there is a high degree of frustration in the UK industry that this consultation is causing yet another delay in the domestic RHI.
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?