Rush for renewables as green energy payback tariffs change

Government pay-backs on green heating systems are set to change.

Ofgem has recently announced the new tariffs for domestic Renewable Heat Incentive (RHI) payments which will come into effect on April 1st 2015, prompting a rush for renewables.

The domestic RHI scheme rewards householders for going green by paying them for the renewable energy required to heat their home. These tariffs are set in pence per kilowatt hour and are reviewed four times a year.

Ground source and air source heat pumps and solar thermal panels are to enjoy an inflationary increase this spring whereas the tariff paid for running a biomass system is to fall.

The Department for Energy and Climate Change has set fixed thresholds for each environmentally friendly technology which, when reached, automatically trigger a cut or ‘degression’ in the tariff that will be paid to new scheme applicants.

Uptake is monitored and reviewed on a quarterly basis and any changes announced one month before they come into effect.

Said Kate Wright, of Blubberhouses-based Yorkshire Heat Pumps: “We’ve experienced a surge in interest in biomass in the last few months, so it was not really a huge surprise to us that the ‘super trigger’ for that technology had been reached.

“From April 1, biomass tariffs are down to 8.93p/kW hour – from a start point of 12.2p when the scheme was launched in April 2014. However, it still represents a very worthwhile alternative for many homes switching from fossil fuel systems.”

Degression triggers have yet to be reached for air source and ground source heat pumps and solar thermal panels, and tariffs are increasing slightly for these technologies due to an annual RPI inflation adjustment.

Kate said: “There was a real rush in the run up to Christmas with biomass customers wanting to beat the expected degression and we have seen this happen again in the run up to April, with a tariff drop of 20 per cent being the catalyst for those considering a biomass installation to take urgent action. March is proving to be a very busy month for installers.

“Conversely, I am sure there are some householders with heat pump or solar thermal installations in the offing, delaying installation, and benefitting from the slightly higher tariffs from April.”

Michael and Kate Wright
Michael and Kate Wright

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