“The long-anticipated results of the RHI consultation were recently announced. It is a relief to see that it still exists and that support for solar thermal continues. The budget allocated and the decision to support heating for this parliament were very welcome and gives certainty to the heating community. The current process however still limits the deployment of new technology that, by its very nature, cannot be included in strict definitions. Minus7 has been lobbying for a technology neutral stance for the RHI and will continue to do so.
It is widely acknowledged that to achieve the UK’s carbon targets, the country has to decarbonise heating. Many studies also suggest that electrification of heat and the use of electric heat pumps are a way to reduce carbon in heating; accompanied of course by strategies to decarbonise grid electricity.
The UK is behind Europe in the use of heat pumps. The RHI consultation document comments that 65,000 heat pumps have been accredited in the scheme since its inception, in 2009. Compare this with France that has over 250,000 installations and a market that is growing at 20% per annum.
What can we learn from what France is doing at the moment? Clearly the structure of the market is different in that energy prices are significantly higher, strongly driving the economics of all renewable energy. France also has a tax credit that stimulates the market (taking it away reduced heat pump installations in 2010, re-introducing in 2013 with stronger policy support increased take up).
Clearly, any energy source that backs out electricity/gas should be supported – i.e. all renewable energy generated, net of grid electricity, for any technology including of course heat pumps and solar thermal – this incentivises higher efficiency heat pumps, and energy storage, which is what we want.
PV was driven into the market by generous government subsidies. The growth in bio-mass has also been driven by generous government subsidies; but people still have concerns about biomass as a viable energy source in the UK, given its supply chain. Yet we note the slow pace of ‘de-gassing’ the heat networks and wonder why. The country has invested a lot in analysing the heating market and working out strategies. But, the current RHI heat tariff is not generating the pace of change needed. Perhaps it could be supported with other policy levers? There are a few that we can recommend:
- Technology neutral renewable energy support
- Government regulation support in the form of zero carbon homes
- Support to reduce the cost of the upfront capital for renewable systems, be it taxation support through capital allowances, stamp duty on property sales, loan interest relief.
As Bareness Neville-Rolfe said “There have been a lot of twists and turns in energy policy, but we haven’t yet addressed the issue of heat strategically. I believe we need to do that now”. We couldn’t agree more.
As we are still in Pantomime season, I am reminded that heating has often been called the Cinderella of energy policy. 2017 is the time for the fairy godmother, played by the BEIS, to turn Cinderella into a Princess.