Industry players have signalled their intention to use more renewable heating after the government launched its incentive scheme.
The government published details of the £860 million Renewable Heat Incentive scheme it hopes will help cut carbon emissions by 44m tonnes over the next nine years.
Under the RHI, payments will be calculated from the amount of eligible heat created multiplied by the tariff level, which depends on the type of heating system used.
A maximum of 25,000 domestic installations will qualify for a premium payment scheme - with levels set depending on the type of technology installed - from July.
The domestic market payments will start in tandem with the Green Deal, where retrofit work will take place on homes across the UK from October 2012.
Large-scale renewable heating systems already in place include the heat pump installation by Land Securities and Geothermal International at London’s One New Change shopping centre.
Land Securities head of sustainability and engineering Neil Pennell (pictured) said the RHI payment would reduce the capital expenditure on the site, as payments will be backdated to eligible systems installed from 15 July 2009.
Mr Pennell said Land Securities would consider installing further renewable heating systems after the announcement.
“The industry needs to deliver on carbon reduction but it needs to be done in an economic way and the right thing to do is to introduce support for renewable heat.
“For the small builder it may not initially help but RHIs should make it easier to finance projects where they can bring capital to the table to make them work,” he said.
Energy giant E.on reports that it is currently working with housebuilders to deliver renewable district heating solutions for housing developments, which will also qualify under the scheme.
The UK Green Building Council welcomed the announcement but stressed that the scheme could be undermined if minimum energy efficiency standards are not applied to commercial buildings as they will be for homes.
There was criticism of the government decision that air-source heat pumps would not be included in the first part of the scheme as “more work is needed to better understand the costs associated”.
Daikin UK managing director Peter Verkempynck urged the government to talk with manufacturers to better understand how air-source heat pumps could achieve the highest energy efficiency ratings.
Worcester Bosch Group head of government and external affairs Neil Schofield said: “There are a number of questions yet to be answered for the domestic sector, which leaves the picture confused.”