Daikin UK welcomes government RHI reforms

All comments below should be attributed to Nancy Jonsson, Commercial Director for Heating and Renewables at Daikin UK.

“The Government response to the consultation on the domestic Renewable Heat Incentive (dRHI) is a positive development for the renewable heating sector and Daikin UK welcomes the reforms.

The tariffs for air-source heat pumps have been increased by 35.8% from the previous level of 7.51p/kWh to 10.02p/kWh, with the tariff for ground-source heat pumps increasing 1.1%. These changes will be applicable to those participants who make an application on or after the 14th December.

This increase in the domestic RHI tariff rate for air-source and ground-source heat pumps is a clear endorsement of the innovative technology. It is evident that the Government has recognised the vital role that heat pumps can play in reducing the UK’s carbon output, meeting the UK’s renewable energy target, and reducing fuel poverty - placing heat pumps at the centre of its energy strategy.

The report also reiterates the Government’s wider policy of ‘refocusing support towards tackling fuel poverty, with a target to insulate one million homes during this Parliament’, calling for households to be future-proofed ‘to enable heat pumps to be installed at a later date’.

It is the Government’s hope that these tariff hikes will result in an upsurge in the installation of heat pumps across all sub-sectors of the domestic housing market – including social landlords, local authorities, private developers and private house owners.

Alongside increases in tariff rates, the Government is enforcing a clearer directive on heat pump metering and a cap on annual payments made with regards a single property. This doesn’t exclude any property but will limit annual payments to 20,000kwh for ASHPs.

All new applicants for support under the domestic Renewable Heating Scheme will be required to have electricity metering to monitor their heating system to give the householder an understanding of the systems energy consumption. However, payments will continue to be on the basis of the deemed heating requirements of the property, except for second homes and where a renewable heating system is installed alongside another heating system. In these situations, payments will continue to be on the basis of heat metering.

To further understand and drive improvements in the market, monitoring and metering service packages  (MMSP) have been restructured. Fifty percent of the payment will now be made upfront, with the remaining fifty percent being made over a seven-year period.  In addition, the reforms will also reduce the frequency with which metered data should be uploaded from weekly to monthly.

As a supplier of heat pumps with an ERP label of A++, Daikin UK welcomes the scheme’s new policy regarding metering. We believe that it will provide further empirical evidence of the ability of heat pumps to make a significant and positive contribution to the UK’s carbon reduction targets. 

In fact, at Daikin UK, we already have electricity meters in our portfolio and have been heavily involved in the ambitious Smart Communities Project in Greater Manchester. This project has been using meter monitoring to demonstrate the feasibility of aggregation systems and establish the business model for the residential market.

As the reforms made by the Government settle, we can look forward to the positive impact that the inevitable increase in the installation of heat pumps will have across the domestic heating sector. Ultimately, this will deliver cleaner, more efficient, cost effective and renewable heating nationwide.”

For more information on Daikin UK please visit www.daikin.co.uk and follow @DaikinUK on Twitter.

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