Low carbon heat programme ropes in just 79 households in the first two months

Heating buildings is the single most important use of fossil fuels in high latitude countries such as the UK. In the average British home gas use is almost five times as much as electricity consumption. The Green Deal is a part of the approach to cutting heating demands but ‘the Renewable Heat Incentive (RHI) is the main scheme of the heat strategy’, according to DECC. The RHI for domestic homes was finally launched at the beginning of April after a gestation period of about five years. According to the most recent data, just 79 homes signed up for the RHI in the first two months. Although the RHI subsidy scheme offers some tempting payments, the signs so far are that this scheme will fail in the same way as the Green Deal has done.

The domestic RHI makes a guaranteed payment per kilowatt hour of ‘renewable’ heat produced by air and ground source heat pumps, rooftop solar hot water and wood burning boilers. These subsidies persist for the first seven years after installation. Regular readers of the comments on this blog will know that many air source heat pump installations have turned out to be horrible disasters for homeowners. Except in unusually well insulated houses, the RHI provides nowhere near enough subsidy to cover the increased cost of the electricity needed to operate the pump.

Solar hot water systems are paid over 19 pence per kilowatt hour for each unit of heat that is produced. This might produce a subsidy payment of £400 a year for homeowners spending perhaps £4,000 to put solar collectors on their roofs. Unfortunately, those of us foolish enough to have installed solar collectors ten years ago know that the cost of the annual maintenance for the system tend to outweigh the likely savings.

More pertinently, it is almost impossible for anybody reading the DECC manuals on the RHI to work out exactly how much their solar hot water payments will be. The subsidy is geared to the size of the house and the number of the occupants but I have to confess that I am completely unclear as to how to calculate the amount of heat that is deemed to be produced, and therefore the subsidy payments that are due each year. I cannot  even find the document that specifies the formula to be used. (Can anybody help??)

One solar hot water installer told me recently that he had decided to give up installing systems. It isn’t worthwhile to pay the cost of maintaining his authorisation.

This leaves biomass boilers. In certain circumstances, such as in a new house, the finances of biomass look really attractive. The payments for a medium sized home with a heating need of 15,000 kilowatt hours (about the UK average) will be almost £2,000 a year for seven years. This is certainly enough to cover the cost of the system in most circumstances. In addition, if the home is off the gas grid it will be replacing oil or LPG (perhaps 6p per kWh) with wood pellets costing about 5p per kWh. So there is actually a saving on fuel bills as well as the subsidy.

But whether the owner of an existing home heated by LPG or oil would think it worthwhile to put a pellet or wood chip boiler in the house to replace the existing apparatus is much less certain. The dislocation is likely to be very painful.

So perhaps we shouldn’t be surprised that even after the extraordinary amount of work that DECC put into designing the domestic RHI scheme it looks like failing to capture the enthusiasm of installers or homeowners. The number of new systems is deeply depressing.

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 Air source heat pump





 Ground source heat pump










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In the first two months of the scheme – which had been heavily pushed for almost a year in advance – the total number of RHI installations was 79 spread across the four different technologies. This equates to about 500 homes a year.

Of course things may improve as the scheme gets better known. But I‘ve seen very little sign of any increase in interest. If the RHI is indeed ‘main scheme in the heat strategy’, we’re not going  to see any observable impact on carbon emissions  from any government policy. The Green Deal continues to underperform with a total of just 1,372 plans signed over the first 16 months. In addition, the retreat from the Energy Company Obligation means that free insulation rates have fallen sharply in the last few months, with the April installation rate (about 33,000 individual measures) lower than any other month since June 2013. It’s difficult not to conclude that policymakers have completely lost interest in decarbonising domestic heat.