The Government’s £2.9 billion domestic Renewable Heat Incentive scheme due to be launched in Spring 2014 is, as it stands, costly, impractical and unlikely to attract consumers unless the focus changes, says OFTEC.

Figures from the Energy Saving Trust*, backed up by OFTEC estimates, show the cost of installing renewable technologies will be prohibitive for all but a few, even with RHI payments.

Additionally, the cost savings from renewable heating systems do not justify the conversion costs even with RHI which will only pay subsidies for seven years. At present the average cost to heat a three bedroom home using the Government’s favoured renewable technology, an air source heat pump, is only £8 less expensive per annum than using a modern condensing oil boiler.

The cost, disruption and impracticability of installing heat pumps will also deter many consumers

as, to work effectively, they either need new over-sized radiators to be fitted (although, in the majority of cases, there won’t be space for these),  and/or under-floor heating. These systems will impose considerable disruption on homeowners. Homes also need to be fully insulated and, as many rural properties that the Government is targeting are old (pre-1914), cavity wall insulation is often not an option.

A further issue is that most homeowners would only consider replacing their existing boiler when it is beyond repair. However, in these ‘distress purchase’ situations, the householder is unlikely to have the time or be in the right frame of mind to consider alternative technologies.

OFTEC’s concerns about possible low take up of RHI are reinforced by the findings of a recent

report commissioned by the Government** which looked at the heating systems that people would favour under RHI. Just 6% of those questioned would opt for renewable technologies and the majority (81%) would make no change to their current heating system.

To help reduce the UK’s carbon footprint, OFTEC has promoted the use of a bio-liquid fuel (called B30K) for oil fired homes which is a blend of FAME bio-fuel (30%) with kerosene (70%). This fuel has been proven to run on existing oil boilers provided minor modifications are made and would contribute nearly the same reduction in CO2 as the RHI’s more impractical renewable alternatives.

However, B30K has not been accepted by the Government as eligible for RHI in England and

Wales although it is under serious consideration for the RHI scheme in Northern Ireland. Switching from kerosene to B30K could cut CO2 emissions in the average oil heated home by nearly 30%.

Jeremy Hawksley, Director General of OFTEC, comments: “Whilst we recognise the need to reduce CO2 emissions from heating and the potential benefit of the RHI policy, it is unlikely to attract the support it needs to make an impact on the UK’s carbon footprint.

“We suggest a more stepped transition to low carbon heat which would see hybrid, or bivalent, solutions with oil or bio-liquid condensing boilers working in tandem with heat pumps. This option is recognised in the RHI although only the renewable element of the heat will be grant aided and the high capital cost of the renewable equipment will deter the vast majority of homeowners.
“Hybrid systems, too, would be much more palatable to the consumer with minimal disruption as existing radiators can be used.

“The domestic RHI needs to be re-designed to focus on a phased approach to decarbonising home heating. Only this will get public support and ensure that we successfully reduce the UK’s carbon footprint.”

* The average cost of installing an Air Source Heat Pump is £8,000, a Ground Source Heat Pump £13,000 and a Wood Pellet Boiler £10,000, compared to just £3,000 for a new, high efficiency (90%+) condensing oil boiler.

**Homeowners’ Willingness To Take Up More Efficient Heating Systems (March 2013) commissioned by the Department of Energy and Climate Change from Ipsos/ Mori and the Energy Savings Trust.