RHI Consultation Response
14 December 2016
The Ground Source Heat Pump Association broadly welcomes the BEIS response to The Renewable Heat Incentive – A Reformed and Refocused Scheme consultation, because this starts to bring improved certainty to the marketplace that has been left holding its breath for several months.
Baroness Neville-Rolfe has made an important speech during which she underlined the importance of heat pumps in tackling the challenge of heating our buildings in a future low carbon economy. She touched on heat networks, heat storage and heat recovery – all of which are well suited to promote ground source heat pump deployment at a large scale. To support this, she also announced the launch of several further key consultations and the long awaited publication of the reforms to the RHI scheme.
The reforms make some significant changes that ensure all types of renewable heat technologies can benefit from public funding. This includes a modest rise in the headline ground source heat pump Domestic RHI tariff.
The proven and highly successful retrofit of GSHPs into tenanted housing using micro district heating systems, featuring shared ground loops, will become more easily financed as the payments are to be deemed rather than metered. Such schemes will also be eligible for the new tariff guarantee procedure. This focus on the unable-to-pay will make winters more comfortable and less worrisome for large numbers of the growing elderly community.
The newly introduced tariff guarantees, available prior to financial closure for all Non-Domestic projects over 100kW, will make it much easier for financial directors to commit capital funds knowing that the returns are secure. This new subsidy certainty, coupled to the fact that the RHI as a whole is funded until Spring 2021 will allow the industry to commit to growth and allow a strengthening of the supply chain.
However, it is not all positive news. The Association is disappointed with the introduction of the capping of payments for larger domestic systems, especially given that 56% of responders to the consultation argued against this, and given that this has been an area of strong deployment under the RHI to date, resulting in very significant carbon savings. The Association will be closely monitoring the impact that this has on the market place and on members, and will be continuing to engage with BEIS on this particular policy as we move through 2017.
The GSHPA thanks Baroness Neville-Rolfe, and in particular the staff at BEIS, for a detailed engagement over the course of 2016. Almost seven years after Government's first RHI Consultation, the scheme now provides a solid platform that can be used to develop the future post-subsidy policy framework. This will further spur GSHPA members to deliver the aggressive but sustainable growth in GSHP markets over the next decade that will be essential to help the UK meet its legally binding energy security, fuel affordability and emissions reduction targets.
The full text of the Government response is available here.