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Renewable Heat Incentive: Too good to be true?

13,327 RHI domestic applications were made between the scheme launch on 9th April 2014 and 31st Otober 2014 and even with the bulk of these being legacy applications, the figures for new applications do show a steady growth month on month.

I always said that, like the Feed-in Tariff and the non-domestic RHI, the domestic RHI would take a year before we saw any real traction in the marketplace. It seems that it takes almost a year for it to become tangible and for people to believe and understand the possible return on investment. Only 2,402 of the total 13,327 were new applications.

So, do people think the RHI is too good to be true? Speaking to DECC (Department of Energy and Climate Change), who designed the scheme, it is more a case of lack of awareness. There is no budget to market the scheme beyond a series of roadshows and so the awareness raising falls to installers of the eligible systems, namely, biomass boilers, ground and air source heat pumps and solar thermal.

What is pretty certain is that there has never been a better time to convert your oil or LPG boiler to a renewable heating system. The reason I say that is because the RHI tariffs are still high which along with savings on heating bills means excellent, short payback times. The industry can still cope with the demand and prices are competitive. Fossil fuel prices are lower than they have been for a while but this is surely temporary and probably a result of the US and Saudi Arabia artificially depressing the price to impact on the Russian economy. 

Why is the UK government committing and spending so many millions on incentivising householders to convert from fossil fuels to renewable heat? 2020! The alternative is massive fines if we don't meet our EU carbon emission and energy from renewables targets by the year 2020. The UK has one of the lowest targets of the 27 member states but also had a very low starting point!

Ofgem who manage the Renewable Heat Incentive for the government announced a degression of the tariff for biomass boilers of 10% for systems commissioned in the 3 months following 1st January 2015. The tariffs are reviewed on a quarterly basis and where targets are exceeded for specific technologies, the tariff is reduced. 

As I said earlier, this is an excellent time to convert your fossil fuel boiler to a renewable heating system!

Ofgem's latest Renewable Heat Incentive quarterly report is available here.

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Ecoliving is a specialist provider and award winner of micro-renewable energy solutions - heat pumps, biomass boilers, combined heat and power (CHP), underfloor heating, solar and wood burning stoves. We also offer service, repair and maintenance.

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