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Will the RHI create a new installation stampede?

Dear Sir,

The government has recently published the tariff proposals for the Renewable Heat Incentive, due to start in 2013.

But will it create a new rush on installations, in the same way we witnessed with solar PV back in 2011?

The payments are designed to pay for 20 years’ worth of heat generation, but paid over a seven-year period. Confused? So were we to start with!

While the deeming process is yet to be confirmed, having looked at the proposals, and doing some basic calculations on solar thermal, here’s what it could look like:

The ‘average’ house requires 3,700 kwh/annum for hot water. The tariff payment is 17.3p/kwh.

A two-panel solar thermal system should provide around 60 per cent of the hot water demands, and so will generate 2220 kwh/a.

It will therefore produce an annual RHI payment of £384.06 – a total of £2688.42.

You need to include ‘average’ savings on reduced bills (gas) at around £100 per annum, but factor in pump running costs of around £100/annum.

With an install cost of around £4,500, it doesn’t look like it’s enough to trigger a stampede of solar thermal installations.

Please note: the tariff payments and deeming process are not confirmed, and could well change, both for the better or for worse!

Barry Nutley, Viridis Energie Consultants

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