Domestic Renewable Heat Incentive is only for the rich, says OFTEC

Published:  04 April, 2014

The government's £1.8 billion domestic Renewable Heat Incentive is costly, impractical and unlikely to attract mass consumer support, according to OFTEC.

Instead, the Oil Firing Technical Association is calling for a boiler scrappage scheme and increased provision for hybrid systems, supporting a phased approach to decarbonising home heating.

“The RHI looks set to be as unsuccessful as the government’s ‘flag ship’ Green Deal,” said an OFTEC spokesperson, which has seen just 1754 of the 150,000 households that have undertaken a Green Deal assessment actually signing up to the scheme.

According to the association, figures from the Energy Saving Trust back up estimates that show homeowners face upfront costs of between £8,000 and £14,000 to install renewable heating systems, depending on the size of the property and the technology used.

OFTEC asserts that these high upfront costs for householders mean domestic RHI is only fit for the wealthy few. The “expense, bureaucracy and impracticality” of installing renewable technologies under RHI will be major barriers to take-up, it claims.

It also suggests that favoured technologies will fail to deliver benefits, with savings from using renewable heating systems unlikely to justify the capital expenditure when RHI will only pay subsidies for seven years.

OFTEC also highlighted results from an independent report published in March, commissioned by the Department for Energy & Climate Change, that found just 4% of people would consider renewables under RHI.

“Most homeowners would only consider replacing their existing boiler when it breaks down and is beyond repair. 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,” said the spokesperson.

Jeremy Hawksley, director general of OFTEC, said: “While we support the need to reduce CO2 emissions from heating and recognise the potential of an RHI policy, the current scheme is highly unlikely to benefit the large majority of rural households as they simply will not be able to afford it.

“We suggest a more stepped transition to low carbon heat which, among a range of approaches, would see hybrid solutions with condensing boilers working in tandem with heat pumps. Supported by the Heating & Hot Water Industry Council (HHIC), this option is recognised in the RHI although only the renewable element of the heat will be grant aided and the high initial capital cost of the renewable equipment will deter the vast majority of homeowners from going down this road.

“These hybrid systems would be much more palatable to the consumer with minimal disruption as existing radiator installations can be used.”

Further to this suggestion, OFTEC proposes the re-introduction of the successful boiler scrappage scheme, which it says would deliver benefits more quickly and cheaply to households and the environment.

“A simple, boiler scrappage scheme would attract far more supporters than the proposed RHI and thus go further in helping households reduce CO2 output - as well as cut fuel bills,” said Mr Hawksley.

“The domestic RHI needs to be re-designed to focus on a phased approach to decarbonising home heating. Only this will get public support and ensure that we successfully reduce the UK’s carbon footprint.”

Pictured: Jeremy Hawksley, director general of OFTEC