Electricity isn’t the only form of energy

The planned RHI (Renewable Heat Incentive) scheme is almost with us, but seems to be seriously watered down when it comes to solar water heating on domestic properties.

Where is most of domestic energy consumed? In heating!

How is most of that heat generated? By using gas or oil or coal, rarely electricity!

What do the government want us to cut down on?  Our consumption of gas and oil and coal.

Looking at hot water alone and lets say I have a choice of heating it using solar hot water or electricity. Throughout the summer I can have all my hot water heated by a solar water heater which comprises a contraption made up of glass, copper and insulating material, all relatively low tech but varying in efficiency depending on the way it is formed, perhaps solar flat plate or vacuum tube.

This solar water heater will cover between 4 and 6 square metres of my roof and provide all my hot water from , late spring to early autumn. The whole system will cost in the region of  £4,000, is reliable and relatively maintenance free.  Very little electricity is involved.

 Conversely, I could do the same job with £10,000 to £20,000 worth of solar PV, which while I might have to pay a great deal to  install, I will get paid Feed in Tariffs which will pay back the full costs in 10 years and give me a profit for another 15.  These solar PV panels are very costly to make, invariably imported from China, consume vast amounts of rare metals and are very costly in energy to manufacture.  

If the Government really wants to cut down on the use of energy, they should proactively support the installation of solar water heating, in my opinion to a greater extent than solar PV as there is a far greater carbon saving return per £ invested whether through grants or when considering the cost of the installation. 

More information on the  Renewable Heat Incentive and how it relates to Solar Water Heating can be seen here within a press release from the Solar Trades Association placed on the solaruk website. http://www.solaruk.net/news/solarenergy.asp?item=2170

The Government seem to have got hung up on electricity rather than energy.

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Renewable Heat Incentive RHI

The aim of the RHI is to provide an incentive to people to generate usuable heat without consuming carbon.

This incentive is planned to be paid where a unit of heat is created that avoids the burning of carbon (oil/coal/gas) or multiplies the amount of heat rather than having a direct generation of heat. An example of this being the use of a heat pump.

The ideal technology for RHI is Solar Water Heating, once installed (apart from the pump) a totally carbon free means of heating water. With a heat pump, the heat that is accounted for on the RHI is the difference between that which would be generated by heating air or water directly using electricity and the actuall heat given out. So a heat pump that has a conversion ratio of 3 to 1 could be said to provide 2 units of carbon free heat for every 1 that uses carbon.

The unit of heat is nominally going to be measured in MWhr under the RHI.

The RHI committee are looking at the ROI (Return on Investment) and how to measure.  One of the ways of measurement will be to set a nominal effectveness for a technology and work out an annual incentive payable on an installation.

Potential for Fraud within the RHI

I can see this being wide open to abuse. Lets say I have a Heat Pump that runs for the 1st two or three years, it means I don’t have to use my boiler and I get an annual incentive for using what is a marginally cheaper system.

Once the system is beyond the warranty period, lets say it fails and repairs will cost the equivalent of 2 years worth of incentive. With a failure I will anyway switch on my boiler, I need heating, then I must arrange a repair. But the RHI continues to be paid as it is not based on a meter. Even if there is some facility for inspection, all I have to do is say it failed last week and I am arranging a repair.

The same will apply to any system that is not metered in a verifiable way.

Insurance

As a solution, perhaps include a mandatory insurance policy that is paid out of the RHI. This can be open to competition as with car insurance, but the payment of RHI is dependent on the equipment being insured. This will have an additional bonus in that reliable systems will cost less to insure and therefore challenge the market to improve quality. To an extent, as with the motor insurance trade, this will represent an unofficial but effective additional  regulation of the RHI.

Insulation

Now, the RHI is there to pay an incentive to reduce the use of carbon in heating. But lets say I have a house with an energy bill of £1,000 to heat it. I switch to a Heat Pump and with incentives covering my 2/3rds heating that is carbon free my heating bill comes down to about £300.

But what if I super insulate my house such that I match that reduction in energy use. Or turn my thermostat down by a notch and put on a jumper and save £500? It seems the RHI is focused on making money for people who both have money and choose a technical solution.

cavity wall with additional 2 inches of insulation and weatherboarding.

cavity wall with additional 2 inches of insulation and weatherboarding

Perhaps the granting of RHI for space heating should also be dependent upon the house being as efficiently insulated as possible. Not just the minimum loft insulation and cavity wall, but really well insulated, triple galzing, additional insulation over and above cavity wall, even more loft insulation than minimal!

I would exclude water heating from this as this kind of heating requires a proactive response rather than preservation of existing heat.

Joined up Government? NOT!

I have commented on the Government’s kick in the teeth for the pioneers of renewable energy. Our generated electricity clearly has a far lower worth than newer renewably generated electricity – yet its the same and actually has done far more good for the industry and cost us more than energy coming on stream now!

Now, not content with undermining the renewable energy industry by kicking the pioneers in the teeth, but they are going to do their damndest to kill off some of the the most effective parts of the industry.

At the moment, anybody taking advantage of the Low Carbon Buildings Programme grant scheme can expect a grant of £400 for the installation of a solar water heating system. This can represent a worthwhile 10% rebate on the average cost of  £4,000. This money runs out in about two months! Lets say June 2010

In April 2011 there is the new scheme, the Renewable Heat Incentive which pays a rate for energy generated / CO2 saved for systems that generate heat renewably.

So, anybody who has done the minimum of research will see that it will pay them to delay any installation that might miss the LCBP until the RHI comes into effect. Potentially a 10 month gap for installers that will almost certainly drive many into bankruptcy!

Worse than that, the companies that rely on marketing, pressurized selling techniques with significantly overpriced but low quality systems will hardly feel the effect.  They will survive while the companies that are working within a tight margin to ensure a high quality fair priced system will fail!

Click here for a full explanation of what is going on and the letter that has been written to Alistair Darling can be seen here

A Note on Sales Techniques.

When I was promoting Solar systems about 5 years ago, after a mail drop I got 600 positive responses out of about 100,000. Actually that is good. Of these responses, each being visited by a technician, no hard sell just a system being promoted on its merits and low price I got 3 sales.

I spoke to a competing company that used pressurized selling. My systems sold for less than £4,000 theirs, using the exactly the same equipment (I was put in contact through the supplier) were generally sold for between £7,000 and £9,000 basically whatever they could talk the customer into paying. They were categorical that they would have converted between 30% and 50% into sales!

The supplier dropped this installer, they were unhappy with their sales methods!