Government’s ‘Renewable Heat Incentive’ will fail to attract support unless focus changes, says OFTEC
Tuesday, Oct 15, 2013
The Government’s £2.9 billion domestic Renewable Heat Incentive scheme due to be launched in Spring 2014 is, as it stands, costly, impractical and unlikely to attract consumers unless the focus changes, says OFTEC.
Figures from the Energy Saving Trust*, backed up by OFTEC estimates, show the cost of installing renewable technologies will be prohibitive for all but a few, even with RHI payments.
Additionally, the cost savings from renewable heating systems do not justify the conversion costs even with RHI which will only pay subsidies for seven years. At present the average cost to heat a three bedroom home using the Government’s favoured renewable technology, an air source heat pump, is only £8 less expensive per annum than using a modern condensing oil boiler.
The cost, disruption and impracticability of installing heat pumps will also deter many consumers as, to work effectively, they either need new over-sized radiators to be fitted (although, in the majority of cases, there won’t be space for these), and/or under-floor heating. These systems will impose considerable disruption on homeowners. Homes also need to be fully insulated and, as many rural properties that the Government is targeting are old (pre-1914), cavity wall insulation is often not an option.
A further issue is that most homeowners would only consider replacing their existing boiler when it is beyond repair. However, in these ‘distress purchase’ situations, the householder is unlikely to have the time or be in the right frame of mind to consider alternative technologies.
OFTEC’s concerns about possible low take up of RHI are reinforced by the findings of a recent report commissioned by the Government** which looked at the heating systems that people would favour under RHI. Just 6% of those questioned would opt for renewable technologies and the majority (81%) would make no change to their current heating system.
To help reduce the UK’s carbon footprint, OFTEC has promoted the use of a bio-liquid fuel (called B30K) for oil fired homes which is a blend of FAME bio-fuel (30%) with kerosene (70%). This fuel has been proven to run on existing oil boilers provided minor modifications are made and would contribute nearly the same reduction in CO2 as the RHI’s more impractical renewable alternatives.
However, B30K has not been accepted by the Government as eligible for RHI in England and Wales although it is under serious consideration for the RHI scheme in Northern Ireland. Switching from kerosene to B30K could cut CO2 emissions in the average oil heated home by nearly 30%.
Jeremy Hawksley, Director General of OFTEC, comments: “Whilst we recognise the need to reduce CO2 emissions from heating and the potential benefit of the RHI policy, it is unlikely to attract the support it needs to make an impact on the UK’s carbon footprint.
“We suggest a more stepped transition to low carbon heat which would see hybrid, or bivalent, solutions with oil or bio-liquid condensing boilers working in tandem with heat pumps. This option is recognised in the RHI although only the renewable element of the heat will be grant aided and the high capital cost of the renewable equipment will deter the vast majority of homeowners.