Installers avoid the Heat Incentive

22.10.2015
Like in most European countries solar thermal in the UK is not seen as an equal compared to photovoltaics. (Photo: The Solar Design Company)
Like in most European countries solar thermal in the UK is not seen as an equal compared to photovoltaics. (Photo: The Solar Design Company)

During 2015, the UK’s solar thermal market for single households continued its long term decline which started over 5 years ago. This was the opposite of the intended effect of all the government’s incentive schemes over this period but without doubt all these have failed for solar thermal. 

It is easy to put blame against the runaway success of photovoltaics and the electrical feed-in tariffs. But other renewable heat technologies have succeeded despite this. An examination of the domestic ­Renewable Heat Incentive (dRHI) statistics reveals the winning technology for the number of new accredited installations from April 2014 to June 2015 is biomass (51 %) followed by air source heat pumps (31 %). ­Solar thermal only has 12 % and ground source heat pumps the least proportion at 6 %. So solar thermal is losing to nearly all other renewable technologies, although under the RHI this represents an average of 430 installations per month.

About these figures, Roger Webb, Director at the Heating & Hotwater Industry Council (HHIC) commented “We are disappointed by the extremely low take up. HHIC’s own statistics show that there are 500 ­solar thermal installations a month, and industry ­estimates that there are over 1,000 heat pumps installed every month, yet these installations do not appear to be using the RHI mechanism. We are worried that this represents a failure of the scheme to appeal to home owners and could indicate that the administrative costs around installation are too high”.

Installing outside of the incentive

Patrick Davis, Technical Director of CoolSky, is in broad agreement “Many small installers / sole ­traders do not see the Microgeneration Certification Scheme (MCS) as providing a commercial ­advantage or existing MCS certified installers are lapsing their certification and therefore install systems outside of the incentive schemes. The application process to access government incentives is too ­costly, complex and ­burdensome. Some companies are ­actually ­promoting and marketing systems that are not MCS certified / RHI compliant stating that the ­lower purchase, administrative and installation costs of such systems outweigh any benefits that could be recovered under the dRHI.”

This suggests there is trend that the industry is turning away from the incentives not only because the consumers are not even aware of the available subsidies but also due to the excessive bureaucracy and associated costs. However it is not clear if the HHIC figures include non-domestic applications outside the dRHI. This leads to consideration of the non-domestic Renewable Heat Incentive (non-dRHI) which are separately reported by the government. In the same period as above we see that solar thermal only secured less than 5 average accredited installations per month. Once again biomass is the winner (94 %) with ground source heat pumps and solar thermal making up the rest of the field (approximately 2 %). When the figures for dRHI and non-dRHI are ­combined, we see that the HHIC are correct to observe the trend of avoiding either RHI scheme.

Installers are leaving the MCS Certification

The government statistics reveal further details in the figures for installation companies that have been ­certified for solar thermal by the Microgeneration ­Certification Scheme. This is ultimately a ­requirement for the end-user to access the RHI schemes when the collector array loop has less than a total rating of 45 kW. There are nearly 900 companies with this qualification and yet with possibly only 430 installations per month, this means the installing companies must also be busy fitting other ­technologies to stay solvent. It is also striking that twice as many installing companies are leaving the MCS solar thermal ­certification as joining. At present the MCS only ­certifies installers against criteria for domestic hot water heating and not swimming pool, space heating or process heating. 

George Goudsmit, Managing Director of AES Limited, calls the UK subsidy landscape in the United Kingdom a ­“minefield”.                (Photo: AES Limited)

The government’s other related national ­incentive schemes, such as the Green Deal and the zero carbon homes, were subject of ­announcements since the ­general election that had indicated they are about to lose funding. This leaves a very uncertain situation across the UK’s regions as suggested by George Goudsmit of AES ­Limited “It’s a minefield with many different incentives, not necessarily in the same ­areas”. Davis concurs “The dRHI is notably different in Northern ­Ireland where solar thermal installations attract an up-front payment of £ 320 with an ongoing tariff at 0.137 £/kWh. Instal­lations in GB do not avail of the up-front payment, ­however, they do have a significantly higher ­ongoing tariff rate of 0.1951 £/ kWh.”

The big strategic problem with the UK government incentives for solar thermal is the high levels of bureaucracy. It is therefore not ­surprising that non-specialised contractors prefer a simple high efficiency replacement fossil fuel boiler rather than solar, as they can self-certify fossil fuel very easily. It is ironic that there is so much more paperwork for systems that collect solar radiation than those that use fossil fuel. But the ­government have also made it that photovoltaic for heating hot water with a resistance heater is more ­financially rewarding than using solar thermal. So the electricians are winning over the plumbers and heating engineers. Without much better marketing by the government, solar water heating is being discussed much less at the point of sale for heating in homes. The remaining hope for UK solar thermal in the UK is the larger heat requirements of space heating support, swimming pools, district heating and process heating.

Chris Laughton

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