Industry welcomes launch of domestic RHI but warns 'only time will tell' if it is enough to encourage real renewable growth

Published:  09 April, 2014

Industry rushes to support the launch of the long awaited domestic Renewable Heat Incentive today, which aims to boost the uptake of renewable heating

The heating industry has largely supported the launch of the long awaited domestic Renewable Heat Incentive(RHI). The scheme offers long-term financial support for homeowners who have low carbon heating systems installed in their properties, in order to offset the cost of installation.

The technologies currently covered by the scheme include biomass, ground or water source heat pumps, air to water heat pumps and solar thermal systems.

Manufacturers, merchants and industry associations alike have responded positively to the news, while calling for industry to join together to make the scheme a success.

"The RHI has been a long time coming but we should all celebrate its arrival and recognise its significance in achieving the UK's carbon reduction targets," said Ian Stares, PTS product director for renewable energy products and a member of the DECC RHI Advisory Group. "The heating industry has been strengthening its knowledge and expertise in this area for a number of years, so I believe we are in a good position to make the RHI a huge success. A lot of hard work has gone into getting to this launch stage, so my message is for installers to seize this opportunity and be enthusiastic about all the benefits it presents to the industry and homeowners."

The Heating & Hotwater Industry Council (HHIC) echoed Mr Stares' comments, calling on the industry to now "get on and make it work". Roger Webb, director at HHIC, said: "We have been working alongside DECC on the detail of the domestic RHI for many months now and we are delighted it is finally being launched. We will be working with our members to ensure that all technologies have equal billing. Favouring one technology over another will not help the UK consumer in the long term, we need a mix. We will also be monitoring the scheme closely to ensure that it can be adapted quickly and efficiently to market changes."

National merchant Plumb & Parts Center described the launch as a major boost to the industry, which renewables director Simon Allan believed would give "renewed confidence" to installers interested in getting involved in the renewable sector, while Mark McManus, managing director of Stiebel Eltron, believes the domestic RHI could transform the uptake of renewable technologies in the UK. "We have seen the success of the commercial RHI, so the introduction of the domestic RHI is a natural next step on the road towards meeting the UK’s carbon reduction targets," he added.

Businesses are now calling on those installers who have not already undertaken training in this area to do so as a matter of urgency. Stephen Knight, commercial director for Navitron, a UK designer and installer of renewable technologies, said the launch had been a long time coming, adding: "It's good to finally see the government come through on its word. Installers throughout the UK should be expanding their knowledge of green technologies and spreading word to customers. Most importantly though, if they haven’t already, installers should be considering joining MCS courses to become certified to perform eligible installations for clients."

Mr Knight added that is still important for everyone in the industry to remember that government incentives don't last forever. To ensure the longevity of the renewable heating sector, installers and distributors alike should use the RHI as a secondary selling point when speaking to customers – instead focusing on the amount of money that can be saved on annual bills and how a building's current carbon footprint can be reduced by installing renewable heating.

"At the moment, it seems that most consumers believe we are selling a way to earn profit through the government, which is not what we do. We sell ways to save money on utility bills while reducing a building's overall environmental impact. Anything else is an added benefit," he concluded.

Worcester, Bosch Group, while welcoming the launch, added a note of caution to the news, questioning whether the RHI will be enough to kickstart a faltering renewables market amid claims that momentum has already been lost.

Neil Schofield, Worcester's head of external and governmental affairs, said: "Although we may have known the tariffs set by the RHI for some time now, the fact that the scheme is now open for applications at least gives us some degree of assurance that the government is willing to promote growth in the renewables market. DECC's decision to finally open the RHI for applications is a welcome one, but only time will tell whether this will give the renewables market the lift it so badly needs.

"With everything now in place, can this market recover from its current state, which is a far cry from four or five years ago when renewables was a buzz word and interest was high? The renewables market has underperformed as a result of a series of delays to the RHI's launch and businesses have been damaged as a consequence. The stationary market we currently have on our hands is certainly a lot more difficult to kickstart than one that is showing signs of growth."

Mr Schofield's concern is that dwindling MCS registrations, coupled with doubts over the RHI tariff's bias, could limit the ultimate success of an incentive originally expected to transform the way UK homeowners heat their properties.

"The fact is, we need a strong base of qualified installers to make the RHI a success, so DECC has a lot of work to do if it is to reverse this decline," he said.

Mr Schofield highlighted that the funding is weighted heavily in favour of biomass, which is one of the most expensive systems to install and one requiring the largest amount of user intervention. Questions have already been raised over whether DECC has backed the right horse in this respect, he said.

"Given the various delays we've seen since the concept of the RHI was first put forward in 2009, we hope this announcement isn't a case of 'the boy who cried wolf' as installers and their customers feel like they’ve seen it all before. As with the Green Deal, we're looking at a slow burner with the RHI and patience will be required before we can assess whether or not it has been a success. Only time will tell."