Falling returns for
solar PV under the feed-in tariff offers solar thermal a fighting chance, says
Solar Trade Association, but only if Ministers retain some support for
technology
The recent cuts to solar
Feed-in Tariff (FiT) incentives may spell good news for solar thermal
installers - but only if the industry can convince the government to keep
supporting the technology under the Renewable Heat Incentive (RHI).
The solar industry is
urging the government to abandon its plans to remove support for solar thermal
under the Renewable Heat Incentive, arguing that it now has a fighting chance
to thrive following the cuts to
support for PV.
The reforms come as the government battles to improve its sluggish
performance on renewable heat in time to meet its legally binding 2020
renewables targets. Ministers have admitted the UK is currently on track to
miss the target, primarily becasue of slower than expected progress with
renewable heat and renewable transport fuel technologies.
Key changes proposed for
the Domestic RHI include the introduction of "heat demand limits" to
prevent larger homes claiming too much of the budget from the scheme, new rules
allowing households to reassign their right to RHI payments to companies that
have installed low-carbon technology, and higher tariff rates for heat pumps.
Notably, under both the domestic and non-domestic systems, support for solar
thermal would be removed altogether from 2017.
It is perhaps
unsurprising that solar thermal is in the crosshairs for DECC. Data released earlier
this year suggested solar
thermal systems accounted for just two per cent of total non-domestic
applications under the RHI and 12 per cent of domestic applications as of
December 2015. Applications for biomass and heat pumps, the two other main
technologies supported under the scheme, far outstrip interest in solar
thermal, the data revealed.
Industry body the Solar
Trade Association (STA) admits that to date solar thermal has not been a
runaway success under the RHI. "Clearly, solar thermal has suffered in
recent years in terms of its deployment," Mike Landy, head of policy at
the STA, told BusinessGreen.
"One of the main reasons that it has suffered is the boom in PV deployment
that has taken place under the Feed-in Tariff... Not only that, but in the
years soon after the launch of the FiTs there was huge uncertainty about
whether the domestic RHI would happen at all."
But that picture is
beginning to change, he argued, as a result of the recent upheaval to the FiTs
scheme that has seen support for solar PV deployment slashed. In January the
government substantially cut the subsidy rates available to PV installations
and introduced a quarterly cap on deployment - and early
data suggests installation rates are falling sharply as a result.
Earlier this year, the
STA conducted a poll of its members asking them to compare the level of
enquiries into solar thermal for the first two months of 2015 compared to the
first two months of this year. Members reported an 88 per cent jump in
interest, which Landy suggests is a sign that solar thermal may be poised to
benefit from the cuts to the FiTs as households keen to cut their carbon
emissions and energy bills look at alternatives to solar PV panels.
In light of this
increase in customer interest, the STA is urging the government not to halt its support for solar thermal
under the RHI. "Our number one ask to DECC is to just leave it for the
time being," said Landy. "We're not asking for an increase in tariff,
we're simply saying do not remove it and allow the market to recover."
Meanwhile, other
renewable heat providers are also concerned about how the proposed changes to
the RHI will affect the deployment of their chosen technology.
The Renewable Energy
Association (REA) warns DECC's plans to move all non-domestic biomass systems
to a single tariff will cause a "collapse" in the deployment of
biomass boilers. The REA has said it has responded to the consultation by
warning the proposed move would result in job losses and a slower rate of
decarbonisation at odds with the country's 2020 renewable targets.
"We need a range of
technologies to decarbonise a range of properties," said Frank
Aaskov, policy analyst at the REA, in a statement. "Rural locations
for example with no access to a gas network cannot be left behind. Biomass
boilers are low cost, provide significant carbon savings compared to oil
boilers, and support the growth of healthy British forests. It is
distressing that the government's proposals would shutter this growing industry
and would have us rely instead on largely untested technologies."
DECC has claimed the
planned reforms will deliver a "reformed and refocused" scheme for
renewable heat technologies, predicting the revamped scheme would support 23TWh
of renewable heat generation by 2020/21 and deliver between 27 and 40
megatonnes of CO2 abatement under the fourth carbon budget, which runs through
the mid 2020s.
However, some industry
bodies have voiced concerns the proposed changes do not go far enough. A new
report published today by the Energy and Utilites Alliance suggests the
proposed RHI policy changes are unlikely to drive significant progress towards
the 2020 renewables target or major change in the UK heating market.
Isaac Occhipinti, head
of external affairs at EUA, called the plans "fundamentally flawed".
"We advocate that the RHI should be used in a much more targeted
way," he said in a statement. "For each sector of the housing market
the most appropriate heating solution should be identified, this would deliver
the most effective result both in terms of cost and carbon savings."
Similarly, the Heating
and Hotwater Industry Council (HHIC) is calling on DECC to make the RHI more
focused by targeting funding at homes that can accommodate a renewable heating
system and those where the current heating system is especially carbon
intensive.
DECC will now consider
all the consultation responses put forward by the renewable heat industry, with
a final decision expected in July. It is clear that bolder action is needed on
renewable heat for the UK to get back on track to meeting its
renewables targets and provide the foundations for the full decarbonisation of
the energy sector. But only time will tell whether DECC agrees with the
industry over what form that action takes.
Original Post: Madeleine Cuff
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