Feed-In-Tariff proposals will decimate the micro CHP industry, says HHIC

Published:  02 June, 2016

The proposals set out in the Department of Energy & Climate Change (DECC) review of support for anaerobic digestion and micro-combined heat and power (micro CHP) under the Feed-in Tariff (FIT) scheme are farcical, says the Heating & Hotwater Industry Council (HHIC).

“(Micro CHP) units are not only in keeping with the UK’s carbon reduction targets, they could provide much needed support to our energy grid, while also meeting the expectations of consumers for products to ‘do more’,” said Stewart Clements, director of HHIC.

“The proposals set out in this review will effectively stop micro CHP from delivering its potential before it has even begun.”

HHIC understands that DECC has a limited budget and therefore has to balance tariffs to reflect that, however, the association does not believe that the generation tariff delivers an adequate rate of return between for Micro CHP installations. This is because the original research did not include all the product types available.

“Our analysis -submitted for the original consultation in 2015 - based on a wider range of cost data - indicates that a generation tariff of 18p/kWh would provide the necessary level of support for the bulk of the industry. We would be happy to share our research with DECC,” added Mr Clements.

“In addition the introduction of a deployment cap is severely limiting. To achieve economies of scale at a manufacturing level and thus reduce costs to consumers hundreds of thousands of pounds needs to be invested, yet manufacturers are understandably reluctant to make this level of investment until market demand increases. This is where FIT plays an important role. HHIC and its members urge the government to work with industry to develop a FIT scheme that helps the UK meet its carbon reduction targets and encourages homeowners to embrace new technology.”

HHIC’s consultation response to the original review of the Feed-in Tariffs scheme can be found here.

Image courtesy of Shutterstick/pogonici

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