Solar industry ‘left in limbo’ over delays to RHI decision

The Solar Trade Association (STA) and the Energy Saving Trust are among a group of 21 organisations that have penned a letter to the minister of state for energy and intellectual property Baroness Neville-Rolfe, calling on her to retain solar thermal within the Renewable Heat Incentive (RHI).

The letter to the new minister – jointly penned by the likes of Friends of the Earth and Greenpeace – argues that solar thermal can play a “major role” in decarbonising the UK’s heat sector both commercially and domestically.

The 21 organisations claim that the industry “is still in limbo” over Government decisions, citing that it has been six months since the launched consultation into the RHI and that the solar company’s “need certainty” in order to attract investment.

“If the proposal to remove solar thermal from the RHI is implemented, the technology will be at a competitive disadvantage and there is every prospect that the current supply chain will atrophy, together with valuable UK skills and the manufacturing industry where the UK has cutting edge capabilities,” the letter states. “We urge you to back solar thermal technology.”

The government launched a consultation into the RHI in March earlier this year. Under the proposed amendments, the industry could be subjected to a 98% reduction in the deployment of non-domestic biomass boilers and an end to support for solar water heating systems.

Specifically, the Government is proposing to reduce RHI tariffs for biomass systems by up to 61%, which it claims would reduce annual installations of non-domestic biomass boilers from 3,023 installations in 2015 to just 65 installations by 2021 – a 97.9% drop in deployment. The number of installations of domestic boilers will drop by 78.8% over the same period.

The signatories have claimed that as an “internationally proven technology” solar thermal has negligible running costs and can integrate with existing heating systems without complication. Instead of cutting solar thermal from the RHI, the signatories argue that the Government should expand application allowances to aid homes in fuel poverty.

The letter warns that the Government would “struggle” to alleviate fuel poverty and reach a 12% renewable heat target for 2020 without the aid of solar thermal installations. The signatories cite analysis from the International Energy Agency (IEA), which ranks the UK 44th for installed solar thermal capacity per capita, as an example of how the country is “lagging behind” on solar thermal uptake.

The STA’s chief executive – who signed the letter – Paul Barwell said: “The industry was shocked, in March, when the Government proposed removing solar thermal from the RHI, whilst retaining support for heat pumps and biomass. Now, six months later, the industry is still in limbo as it waits for the Government’s response. We are confident that the STA made a compelling case to support solar thermal and hope the Government rethinks their proposal. However, it is urgent that we get a decision quickly to end this uncertainty.”

Feeling the heat

However, signs are beginning to emerge that the Government may be softening its stance on the reformation of the RHI. This month, it was revealed that The Department for Business, Energy and Industrial Strategy (BEIS) had launched two new initiatives aimed at supporting the renewable heat sector.

Firstly, BEIS has this month launched the first part of a £320m fund to supply low-carbon and recycled heat in towns and cities across England and Wales. Secondly, the Government acknowledged the need for a “transitional period” to be put in place for changes to RHI for biomass combined heat and power (CHP) plants.

The changes, which were put in place by BEIS’s governmental predecessor the Department of Energy & Climate Change (DECC) in July, came into effect in August and reduce subsidy payments for biomass CHP plants that produced 20% of power – known as ‘power efficiency’ – with the remaining 80% being heat.

Matt Mace

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