Homeowners, schools and businesses will be able to apply for a slice of £860m government funding to help them install wood boilers and solar water heaters under new plans unveiled on Thursday morning.
The "renewable heat incentive" is the first financial scheme of its kind in the world to subsidise low-carbon heating, and over the next decade could reduce carbon dioxide by 44m tonnes – equivalent to taking 20 gas fired power stations off the grid, according to government estimates.
Businesses and public sector organisations are expected to be the biggest beneficiaries of the plan at first, as households will have to wait until October 2012. But up to 25,000 homeowners will be eligible from this July for a special grant to cover the cost of installing green heating.
Ministers also expect the scheme to generate thousands of new jobs.
"This is not marginal ... this is a big, big scheme," said Chris Huhne, energy and climate change secretary.
People taking up the subsidies will receive a rate of return on their outlay of about 12%, according to government calculations. For instance, a large ground source heat pump installation costing about £300,000 would receive a subsidy payment of £27,600 a year.
However, the subsidies will be reviewed over time and are likely to be reduced as the cost of the renewable heat technologies comes down.
About half of the UK's carbon emissions come from heating, but only a tiny proportion of buildings have renewable heat sources, partly because there are only a small number of such sources that are practical and available.
These include biomass boilers, which burn wood pellets, and air or ground source heat pumps, solar thermal heating and boilers that generate electricity at the same time as heating.
However, some of these are difficult to use. Biomass boilers require more attention and refuelling than standard fossil fuel boilers. Ground source heat pumps need to be installed underground and tend to cover a wide area, which makes them difficult to retrofit, particularly in urban areas, so installing them in new houses is easier.
Greg Barker, climate change minister, said the scheme would create "local energy economies", for instance in the sale of wood for biomass boilers. Only about 10% of the UK's available wood biomass is currently used.
The renewable heat incentive has been beset by problems, as the government has struggled to decide how to structure the scheme and how much money should be made available to households.
Unlike the feed-in tariffs for renewable forms of electricity, which are paid for through higher energy bills, the renewable heat incentive will be paid for from government coffers.
The microgeneration industry welcomed the announcement. Dave Sowden, chief executive of the Micropower Council, said: "This scheme marks a world-first long term commitment to a rapid growth in renewable heating."
Philip Sellwood, chief executive of the government-funded Energy Saving Trust, said: "As we have seen with feed-in tarifffs, an attractive renewable heat incentive rate will be a real boost for householders and industry."
But some were disappointed that householders would have to wait until October 2012 to receive the subsidy. Juliet Davenport, chief executive of renewable energy supplier Good Energy, said: "We are concerned that the full scheme won't start until October 2012, a lengthy gap which may spook potential investors. We are also concerned that excluding agents from supporting RHI customers will increase the volume of enquiries Ofgem will face, which may result in delays and confusion similar to those currently experienced by Feed-in Tariff customers. And we don't understand why Ofgem cannot pay customers monthly – which is in the best interests of consumers."
The Renewable Energy Association said the rates of subsidy for solar heating systems was too low.
The government's announcement on Thursday morning was part of a series of environmental announcements aimed at burnishing the coalition's green credentials.
Comments
10 March 2011 11:53AM
Wonder if any of the companies awarded these contracts suddenly feel the urge to donate money to the Conservative party ?
10 March 2011 12:02PM
At last there is action on sensible solutions to heat of power in the home.
Wood pellet-fired boilers are so popular in Germany that it's becoming hard to get the pellets. I also am seeing more and more CHP systems coming on the market.
I did see one system that used biomass to produce CHP, but that was over a year ago and I have not followed this up since.
Let's see what the take-up is in Britain. To my knowleedge, after 30,000 micro CHP units have been installed the governmment will revisit the RHI. Let's hope they continue to support it!
I also look forward to fuel cell micro CHP, although there are still major issues with creating a hydrogen infrastructure.
10 March 2011 12:09PM
After the fiasco of the feed in tariff review, I see the government has now managed to turn the renewable heat incentive into a shambles. No tariff for domestic customers until Oct 2012, no support for air source heat pumps (which in well insulated houses off gas mains can do so much to address carbon emissions), tariff support for incineration. The madness goes on.
10 March 2011 12:09PM
With rising energy costs only going to get higher enough money needs to be made available for every household and business.
All new homes and businesses buildings should be built to be as efficient as possible using all this new technology. It shows how poor the UK is that while other countries do this the UK still do very little to make sure this is done leaving households and business exposed to high energy bills which increase every year as prices increase.
If they need money to fund it the treasury should stop wasting time and start supporting the green bank and close down tax loopholes that cost the UK tens of billions and use the money to reduce the cuts and help schemes like this. People need to ask MPs what is being done now rather than letting them get away with doing little or nothing.
10 March 2011 12:10PM
After the fiasco of the feed in tariff review, I see the government has now managed to turn the renewable heat incentive into a shambles. No tariff for domestic customers until Oct 2012, no support for air source heat pumps (which in well insulated houses off gas mains can do so much to address carbon emissions), tariff support for incineration. The madness goes on.
10 March 2011 12:14PM
We are aware from Gov data woodchip boilers create PM pollution 60-80 times higher than gas and 12 times higher than oil , the Gov confirm the deterioration in air quality caused by biomass combustion will add £billions to NHS costs.Current biomass burning proposals will involve importing millions of tonnes of wood thousands of miles to burn in UK and degrade air quality. Where is the joined up thinking ,due diligence and duty of care?
10 March 2011 12:16PM
Oh the irony. In 1966 the then labour Government under Harold Wilson started a serious study into CHP schemes, particulary one to divert the waste steam from coal fired power stations going up large water cooling towers and being pumped to peoples homes instead. Ted Heath gets into power and the whole idea is scrapped due to 'Lead in Costs'.
We could have been well ahead of the game 40 years ago, but Tory economic policy, decided otherwise...
10 March 2011 12:33PM
Indeed, it would be more efficient to incinerate at a power plant, generate electricity and use that to run heat pumps.
But I suppose it is cheaper in the short term to go back to burning coal in the fireplaces, so let's do that.
10 March 2011 12:35PM
Greenest government ever - what a joke.
After trashing Green Deal, confining new housing energy standards to the dustbin. This government has a reverse midas touch when it comes to policy in almost every area. Sticking a tree on your party logo does not amount to being green.
10 March 2011 12:37PM
As far as heat pumps are concerned, unless incentives are specifically targetted on homes with existing electric heating - night store heating and so on - it does not make a lot of sense to encourage their installation, when we're not awfully sure where the electricity to drive them is coming from.
Replacing night store heaters will reduce electricity demand somewhat and carbon emissions a bit, too, but would be expensive because of the need to install ordinary radiators. Would also get people out of fuel poverty.
10 March 2011 12:37PM
Air source are planned to be included from 2012, but there are issues regarding effectiveness and measuring the heat produced from them. New ASHP installs will benefit from the RHI Premium payment in the first year, which would seem to be indicative of a genuine intention to include them in the tariff structure.
10 March 2011 12:37PM
Blue Cloud - Problem is how do normal houses accommodate Biomass and how will this affect air quality?
More support on CHP would be great, but until the products are actually commercially available we will be left to contend with the myths of heat pumps.
10 March 2011 12:40PM
Having dealt with Ofgem over the Feed in Tariff I can't think of a worse body to administer the scheme. Another good idea handed to the small minded bureaucrats to destroy.
10 March 2011 12:41PM
Ground (and air) source heat pumps are basically a no brainer. for every unit of power put in to drive the compressor you can extract 4 units of heat from the ground.
The RHI is absolutely fundamental to developing distributed energy generation. These types of technologies, heat pumps, solar thermal etc. are absolutely suitable to a northern european climate where alot of our domestic energy is used space heating.
10 March 2011 12:44PM
And none of this any use to those of us who rent (read - outpriced from the housing market) who continue to lead a life where we pay exorbitant rents for housing with poor insulation and energy sources. Usually no proper opportunity to grow your own veg either. At least fuel bills are lower when the landlord takes weeks to mend your boiler - oh, I forgot, the immersion heater costs a lot. Really, we need a programme of making rented properties energy efficient.
10 March 2011 12:47PM
Will83 - Heat Pumps don't provide anywhere near that level of efficiency. Also ask yourself where they get the electricity from?
10 March 2011 12:50PM
Pinti
I know of many houses in Germany which use wood pellets for heating. Air quality is not an issue that I am aware of. The pellets are delivered by truck and fed into a storage container that automatically feeds the boiler.
Simply put: The system works. It is carbon neutral and is very popular in Germany.
10 March 2011 12:54PM
Filters. They're quite effective, you know.
10 March 2011 12:55PM
ground source heat pumps can be installed vertically removing the space issue. the problem becomes they need to be linked to a underfloor heating system which will be a nightmare to retro fit and is only practical for new builds.
10 March 2011 12:58PM
It's not feasible to retro fit ground source and it's not worthwhile anyway in older houses with higher u values.
Neither is air source, additionally air source pumps require replacing every 5 years and the cheaper models need re-setting following a power cut by a qualified engineer; not good if there's a power cut on a cold Xmas Eve to a new estate all fitted with them!
We've ripped out our disgraceful economy7 and fitted German made storage rads. which are fantastic. They require far less kilo-wattage per rad. and control the room temperatures automatically 24 hours a day. Our overall electricity bill for the last quarter was a little less than last year's winter quarter but over the year it's dropped to 60% of the last equivalent year we had E7. Not only that we're warm 24 hours a day now, even during last December.
We don't have the crazy situation where the E7 were knocking out heat we often didn't need during the day in the hope there'll be a bit left at night.
Finally our daytime tariff dropped from 16.9p per unit to 9.65p per unit simply because we'd got rid of our E7 meter!
10 March 2011 1:00PM
Large UK study from EST - Getting warmer: a field trial of heat pumps
www.energysavingtrust.org.uk/Publication-Download/?oid=1801485&aid=4898250
10 March 2011 1:04PM
@Pinti they can get their electricity from my solar PV system on my roof there are now a number of houses in the UK with these technologies and have no bills.
Biomass may work in larger scale, but I certainlly don't think it is a good thing in domestic properties. There are still emissions and the pellets have to be delivered by lorry- which consume diesel oil.
It is also still burning things, which at the end of the day doesn't create a particularly good heat. The lower constant background temperatures that heat pumps create is much better for air quality, condensation within a home rather the the more spiked heating that comes with burning fuel.
10 March 2011 1:06PM
good thread, thanks all
@overhappy, I wrote a little piece about that last year:
UK 'heat pumps' fail as green devices, finds study | Environment | guardian.co.uk
btw, we have a Q&A on the RHI coming shortly -- will package it up and link from this article
10 March 2011 1:07PM
Skimming it, it looks as though it may help to wean public buildings off gas. I know of a local school which is moving off oil for heating, and the RHI may mean it goes for biomass rather than gas - but it's a struggle to get the money up-front.
I have two brothers who live in rural areas, and the premium payment should help convince them to convert - particularly the one who's off-grid and paying horrendous prices for heating.
10 March 2011 1:16PM
Air Source Heat Pumps don’t need changing every 5 years - where did that gem of wisdom come from? Also they don’t need resetting if there is a power cut. Many people who have installed ASHP this winter are rubbing their hands with glee following the increase in the price LPG and oil. Even when the outdoor temp is -16C the worse you can expect is an efficiency of 1kW of electricity in and 1kW of heat energy out -unlike any oil or gas boiler.
10 March 2011 1:18PM
Rather than giving businesses incentives how about giving other's some help to install things like double-glazed sash windows -- I really don't want to put in plastic as it looks crap on a Victorian building. And how abvout some help for solar water heating?
Reducing energy costs in the home was supposed to be a big thing but it seems that all the money goes in to the usual gravy train.
10 March 2011 1:41PM
@oktorockto
So bloody true. Nothing at all about rental properties.
And biomass does have concerns - air quality for one. Filters don't stop everything.....
10 March 2011 1:43PM
ElmerPhudd
Try this link (http://www.magneglaze.co.uk/ )and/or then do it yourself. If done properly you do not notice them at all, you keep your old windows and the cost is a lot less than replacement. I've no axe to grind on this(other than having done some DIY for friends in Cambridge) it just makes sense to insulate before spending on subsidies for power generation.
10 March 2011 1:45PM
This is highly inaccurate and needs to be corrected.
You could perhaps talk to these people or watch this video which shows a vertical ground loop system being installed in a typical 30's semi-detatched property. The ground loop in such systems can also be placed in a lake, a deep well if one is available or similar.
I think it is about time you guys stopped writing article about stuff you do not understand. Stick to veggies and compost heaps in future.
10 March 2011 1:45PM
So the operators of incinerators (sorry, waste to energy plants) can now claim an additional 1.9 p/kwh for combusting Municipal Solid Waste - if they use the heat - but if you build an anaerobic digester and run the biogas through a chp engine you can't claim the RHI for heat used if you are already claiming FiTs for the electricity generated?
Surely biogas and natural gas-fired chp should have been properly supported (it has never taken off in the country but both offer significant carbon savings and energy efficiencies) at the same time as biomass heating was giiven this boost, otherwise industry/schools/hospitals will jump to put in wood boilers without considering other long term options that may be more sustainable - if there is a lurch towards biomass heating, this will prompt the RHI to shrink over time, at which point the spot price of wood pellets goes through the roof, and suddenly, as in the case with biodiesel and palm oil, monoculture "wood" forests will sprout up in developing countries to meet the EU demand for wood - which wont meet the sustainable biomass regulations...
to be sustainable in any real sense biomass heating has got to be a regional development surely - it only makes sense to do it in scotland, wales, N Ireland, parts of England where a local sustainable pellet economy can mature at the same pace as the demand for biomass pellets grows ..
10 March 2011 1:50PM
This is complete madness. Wind generation is four times as expensive as fossil fuels, hydro or nuclear so if we continue on this course, firms will move abroad and we will completely knacker our economy.
These do gooders have no idea how a market economy works. So let me remind them - firms seek to minimise costs, so if the cost of power if four times as expensive as it is elsewhere they will move. The only way such policies will work is if all countries sign up to them, which is not going to happen.
10 March 2011 1:53PM
@Amargi
This winter we burnt about 1000 litres of oil, a full load of logs and about 15 bags of coal. I still wore thermals every day and had a blanket ove rme in the living room. Outr last rental property, I must say, had a log burner and that was very efficient - you could heat the whole house for an evening on about 4 logs. The open fire we have right now - just goes straight up the chimney.
I applied for a Warm Front Grant to get the rental property better insulated last October - as yet the assessor has not come out yet.....
We have double glazing but it is so badly fitted that there are all sorts of draughts!
We are paying £700 a month for this property and its 3 bed, in the middle of nowhere, ramshackle etc. Still the cheapest we could find. This country is a disgrace for renters - and it will soon be a disgrace for many homeowners when they realize they can't hang on to their homes.
10 March 2011 1:56PM
We live next to a wind farm too - they are still a lot of the time. luckily they are next to Dungeness B nuclear power station (It's on the Romney Marsh in Kent). I suggest reading The Wind Farm Scam by Dr. John Etherington. We are being sold a pup by the wind power fanatics. I am totally pro-green but unfortunately lots of the green proponents are not aware of, or capable of understanding, the science of wind power. Rant over - for now
10 March 2011 2:15PM
needfulthingies
If they are thermostat controlled then switching away from economy 7 is best but for most storage heaters the huge amount of energy they need means using economy 7 is far more efficient but in order to reduce usage homes need to be as insulated as possible to reduce costs.
The governments green plans are failing with them scrapping most warm front grants and scrapping plans to make sure homes and business buildings are not build to the same standards as in other countries.
10 March 2011 2:16PM
'Wood pellet-fired boilers are so popular in Germany that it's becoming hard to get the pellets..'
Didn't take someone long to spot the flaw in that suggestion!
Instead of picking winners, presuming that it knows the best method,why does the government not simply grant a rebate or reward to those energy users who can show a given reduction of their consumption after whatever measures they have chosen have been installed? Then the individual user must judge the risk.
The option taken will always be insulation, insulation, insulation, I'm sure. The first question should always be: is your power generation really necessary?
10 March 2011 2:22PM
I hope so, but I suspect it will only be some homes.
Past history suggests that the houses which still most need basic insulation, let alone energy generation, will be excluded. The private rented sector needs the most attention, but never gets any at all.
It's been painful watching these baby steps being made - years now since the commons first started to talk about this and FIT, but a succession of really ineffective ministers like Malcolm Wickes, who did nothing but consult about consultations for years. So it's good it is starting at last, many years behind schedule.
Let's hope we can make up for lost time with the creation of local energy cooperatives and money being available for community wide schemes, owned by the community, where possible.
The big blockage here hasn't just been ministers - its been the energy companies who have cowed them into inaction. I don't think their influence has decreased with the change in govt, so we will have to wait for details.
But if this is going ahead, it means they have found a way to fit energy company profits into the equation somehow.
10 March 2011 2:24PM
We've just had one installed on a new school building. It had a heat meter installed, which measures the heat produced, so I don't see what the difficulty is there. As for the technical difficulties, this is mostly just about if you ask for too much heat for the unit to produce efficiently - they really do need to be in well-insulated buildings but that's the only complexity. And that's the same for ground-source units as well, so I don't see the what the DECC's beef with air-source is.
It's frustrating because we were expecting the school to be eligible for RHI payments based on what the DECC had said at the time, and the building needed some kind of heating so we went for what seemed like it would be the best. Hopefully they'll change their minds and include ASHP soon.
10 March 2011 2:29PM
I am amazed that 'playing the cancer card' Bill96 is still commenting here.
That's an indication that some extremists have absolutely no shame whatsoever.
That's another good reason to pay no attention to Bill69fasho.
10 March 2011 2:33PM
Our "new" ASHP (installed July last year) got us through this winter without any problems. Glad to see the back of our filthy, noisy, inefficient and breakdown-prone oil boiler. But, hey, despite having no access to mains gas, choosing to ditch heating oil despite the dropping of all the Clear Skies/LCBP grants, and switching to a renewable electricity tariff, my ASHP will not qualify for the RHI, initially, at least.
Bravo, DECC, bravo...way to incentivise the most cost effective replacement for oil boilers for us "rural" types.
10 March 2011 2:33PM
Not if the piping is installed down a borehole!
10 March 2011 2:33PM
spot on oktorokto.
It's amazing how the sector with the most need is simply never mentioned. Never seemingly enters the heads of politicians or civil servants.
They are worried that landlords may have to do some work or pay some money over, I suppose. That would never do inspite of the need.
10 March 2011 2:35PM
No mention here of waste heat recovery, which is probably one the simplest and most cost effective things we should be doing - especially in mid-life commercial property. One of the biggest heat losses from any property, domestic or commercial, is hot water disposal - from which we extract no energy. We just pore it down the drain; absolutely scandalous waste on a vast scale.
As for CSP, where do you think the biomass is going to come from? If the favourite fuckwit now advising Hulme has his way, huge areas of the UK will be given over to biomass production. It may be fine in Germany where the dynamics are very different but not here. In the coming decades we will need all the land we can muster for food production.
As an aside, there was a very ugly similarity between maps showing areas culled unnecessarily during the foot and mouth outbreak and our light bulb counter's grand plan for UK biomass production. They will be decapitated faster than you can say 'wood chip' if they dare to advance that communist stunt any further. Some folk are watching the situation very carefully. The smoke and mirrors over the aborted forestry sell-off didn't fool anyone either.
You eco-nutters had better watch out too. The well managed countryside you all crave to ramble over unimpeded was established over centuries using informed husbandry that adapts properly to nature and its many twists and turns. These command and control idiots will destroy all that and much more in a couple of decades if you let them. Just look at these guys, they have no idea what they are doing. If you want to see the likely result go look at some of the worst pollution on the planet in the old soviet bloc.
10 March 2011 2:38PM
I was surprised when I visited a friend of mine in her (usually) rambling, draughty Victorian house after she had a biomass boiler installed - it was so cosy!! She had nothing but praise for the boiler which she had had for over a year. It needed little attention - just the occasional feed with wood pellets. The company which had installed it were excellent, apparently.
Contrast that with my experience of a certain nationwide Gas company :-((
In 2012 I'm going to be at the head of the queue for a grant to put in a biomass boiler of my own - I can't wait!
10 March 2011 2:42PM
@octorockto
I understand there is legislation coming in from 2015 that will force landlords to improve the efficiencies of their homes.
One of my friends has had a frank conversation with their landlord about all this, basically showing that if they leave it to 2015 and be forced into doing it, they will have to borrow the money to buy insulation / renewables through the green deal. If they make the changes now, then they can make money through the feed in tariff and rhi. The House is now in the middle of a conversion...
The role of the EPC certificate is also suppose to help in this area, giving you an idea of how much your fuel bills will cost. Often it's worth paying more in rent for a morer efficient home than a cheap inefficient home.
Might be worth making a deal with the landlord to pay more rent in return for a more efficient house, then your both better off. (and that is the key, to prove to the landlord that they Will be better off, not just you).
10 March 2011 2:49PM
@OverlandintheSun
I take your points but it is a sad fact that a lot of landlords just have their head in the sand. Gas safety certificates are hard to get and repeat checks non-existent. You find supposedly reputable letting agencies letting houses without even satisfying themselves that they are safe or that things like the electric supply/cooker/heating actually work. As for EPC's again, who is policing this, letting agencies don't profer these when you visit. As for feed-in tarriff's - if it is wind power you are more likely to spend more supplying power to the power inverter than you are to get from selling electricity back to the grid. We need a massive input into this. Landlords should be forced to bring housing up to scratch if they want to let it or they should have them compulsory purchased at a cheaper price. My landlord has 25 houses - I suspect they are all in the shape ours is in.
10 March 2011 2:49PM
@muscida I would have to agree, the vast majority of biofuels in this country come from Canada all ready. I do not see the benefit of encouraging this, it will just mean an increase in biofule production in places like Africa and south America, destroying habitat and creating insecurities in food supply. I was in the middle of food riots in Mozambique at the end of last year and it isn't pretty or fair.
There are other better solutions, it's a little selfish to want a biomass boiler just because it looks nice and creates an atmosphere.
10 March 2011 2:50PM
- Needs a lot of PV and a lot of money.
Back of envelope calc:
Domestic heat pump at capacity - say 12kW (?)
PV capacity for crystalline technologies approx. 140W/m2
Area of PV required to provide 12 kW =12 ÷ 0.14 ≈ 86m2
Lower estimate on cost of PV approx. £4500/kW
12kW of PV cost = £54,000
Most of heat is required in winter where PV output may be one quarter of what it is in the summer.
10 March 2011 3:01PM
No wonder the torys were gutted about the u-turn they were forced to make over the sell-off of our forests.
I wonder how long this scheme was known about to them, and I wonder how many are already lined up to profit out of it?
10 March 2011 3:10PM
It's a pittance really, isn't it, anything less than several billion.
A bigger share of socially produced wealth goes in bankers' bonuses than in climage change measures.
10 March 2011 3:29PM
There seems to be a lot of confusion and misinformation on here about some of the technology and systems available.
Speaking from experience, I installed a retrofit Ground Source Heat Pump (GSHP) at my large old Canadian farmhouse a couple of years ago; it does run at an efficiency of c 3.5 to 1 in terms of heat units produced for electricity used to run it. I am therefore heating a large house for c £500 a winter instead of £2k, supplemented by a wood stove. A GSHP should run for 15-20 years with little or no maintenance. However a GSHP does use a lot of juice and needs a 200amp supply, far more than you could generate via solar/wind and store in batteries; so they are NOT an off-grid option! Also, you can go vertically with a borehole (more expensive) if you do not have 2 or 3 acres of suitable ground where you can bury a few thousand feet of plastic tubing 5 ft below the surface. But the systems are expensive (c. $30k in Canada for a 3,000 sq ft house, so I suspect that would equate to £30k in the UK, given the usual cost inflation). Ontario had a $9k up front subsidy and payback on the remainder for me should be less than a decade. They can be used with an air-blown heat distribution system or with underfloor heating.
Air Source Heat Pumps are perhaps a better option for the UK as they are quite efficient down to about -10c and are much cheaper to install, requiring less space etc; it is strange that the government have not included them in the scheme.
Aside from public buildings, schools etc which should be kitted out, most individuals who will be able to install ASHP, GSHP, Solar, Wind etc - even with subsidy - will no doubt be quite wealthy home-owners, probably living in lovely bits of the countryside; in other words Tory voters; many of them, ironically, also probably climate change deniers
Isn't life strange!