Opinion: Domestic RHI - Burn to Earn!
Published by Max Salsbury for 24dash.com in Environment
Call for action over 'rip-off' energy bills
By Michael Burnside, of Bsquared Property
What does the 9th April mean to you? For most it will carry little significance, for others it will signify a key memorable date like a birthday or anniversary.
For Prince Charles at least, the 9th April holds a memory close to his heart; The day he married Camilla Parker Bowles. Bothered? Nope! Neither am i!
So why does this date in time stick in my mind?
The 9th April 2014 brought about the second wave of the long awaited Renewable Heat Incentive (RHI). The world’s first long-term financial support programme for the creation of renewable heat. Sound a bit too technical? If you don’t work in the energy sector then it probably is. So let’s break it down for the common person in the street.
I will use solar panels as my example. 5 years ago or even 3 perhaps, not many people would know or have heard about solar panels. This seems strange when you think the technology behind it dates back to the 19th Century.
These days, however, you’d do well not to find a property in your area that doesn’t have solar panels on the roof. The wave of panels across our homes has become more and more apparent in recent years and will continue to grow. So what sparked this solar panel invasion?
The more discerning eco-friendly members of the public would like to think the wider general population are becoming green warriors, carrying the fight against climate change; which in part can be true. Through widespread media publicity, the general public are indeed more aware of the environment and the ever growing impact we have on the climate; but this alone carries little significance in the growth of this particular type of renewable technology.
Let’s be honest, for most, money talks! It’s no surprise that when the Government Feed-In-Tariff (FIT) subsidy was introduced in April 2010 it created a boom industry and investors with deep pockets were crawling all over it, salivating at the thought of investment returns in excess of 15%; far better than any bank account could offer. Those who got in early are now reaping the rewards.
The FIT subsidy was essentially set up by central Government to promote the use and installation of renewable technology. So, if for example you installed solar panels on your home (subject to survey of course), the Government would pay you for the electricity generated by the panels. You would also get the benefit of lower energy bills if used in the correct way. The earlier scheme was a lot more lucrative than today’s version, which goes someway to explaining why the Government slashed the rates in half overnight back in 2011/12.
So what does this little solar panel history lesson tell us about the new domestic RHI scheme?
In a nutshell, the domestic RHI scheme replicates the FIT but in this offering, the Government will pay you for the generation of heat (instead of electricity), which you would generally use for heating and hot water in your home. Products like biomass boilers, air source heat pumps and solar thermal panels are all included in the scheme and can be good alternatives to more traditional methods of heating your home, if the costs stack up.
It’s no surprise that the traditional log burner is making a comeback and the domestic RHI goes some way to explaining why. After all, a log burner connected directly to your heating system can not only create an aesthetic centre piece for your home but with the added benefit of getting you a couple of quid back off the government.
The Office of Gas and Electricity Markets or (OFGEM) as it’s known in the industry, administers the scheme and whilst there is some excellent information and resources available through the (OFGEM) website it can inevitably be a minefield understanding the requirements of the scheme. Click here for more useful information about OFGEM and the domestic RHI scheme:
Over 1000 schemes have now been accredited under the Domestic RHI scheme. Those on that list are now locked in on the existing tariff rates with guaranteed income for the next seven years. Be warned though, the more popular the scheme becomes, the less money you will get. The scheme is subject to digression rates based on the number of signups so it’s prudent to get in early. Once signed up, your agreed rate shouldn’t change and quarterly payments will be received for a seven-year period.