Leading name in renewables Dimplex has described news of further delays to the Domestic Renewable Heat Incentive (RHI) as ‘extremely disappointing’, and with the scheme now not set to be launched in April 2014, is calling on DECC for urgent steps for greater certainty to prevent a damaging hiatus in the market.
Instead of unveiling details of the keenly-anticipated second phase of the scheme, DECC’s latest announcement means that the struggling renewable heat market will have to wait until the summer for full details of the domestic RHI, followed by a delay until next spring for the incentive to come into effect. The RHPP (Renewable Heat Premium Payment) scheme is to be extended until April 2014 to bridge the gap.
There was also discouraging news for the non-domestic phase of the RHI, where the hoped-for announcement on proposals for revised tariff rates for ground source heat pumps following last autumn’s consultation failed to materialise. The non-domestic sector is set to make the greatest contribution towards the take-up of renewable heat, and developing an effective incentive scheme had been described as a key priority for DECC.
Revisions to the tariff structure for ground source heat pumps are urgently needed to correct a major market distortion which has seen 95 percent of all RHI applications to be represented by biomass boilers and the ground source sector actually contract instead of growing since the start of RHI phase 1.
Chris Davis, business development director at Dimplex Renewables, says: “Given the huge amount of time, effort and engagement the renewable heat sector has put into working with DECC on developing the detail of the next stages of RHI, we are clearly disappointed by the news of further delays. We know customers – both domestic and non-domestic - are putting off committing to renewable heat due to lack of certainty over the tariffs and for fear of missing out, causing a damaging hiatus in the market’s development as a result.
This latest postponement is seen as a serious blow to the many manufacturers and installers who have invested heavily in gearing up for a demand for renewable heat which has not yet materialised.
Chris Davis continues: “We now need DECC to provide some confidence for the market firstly by committing to automatic grandfathering rights to all installations accepted under the RHPP scheme so that all will be 100 percent guaranteed eligibility for RHI support, and secondly by uplifting RHPP levels to give more support to householders up front. These two steps alone would provide a clear indication to the market of the government’s commitment to RHI scheme.”
Despite the setbacks however, Dimplex is urging a ‘keep calm and get back to basics’ message for installers and customers. “While an incentive undoubtedly eases the selling process,” says Davis, “it’s now as important as ever to sell the well-documented benefits of renewable heat on the core principles of energy cost savings, especially in the ‘on-oil’ areas, where inevitable ongoing oil price increases will continue to make renewable heat an attractive and viable option. In these austere times, there aren’t too many options out there these days that households can turn to reduce their long term costs.”