A decision by the DECC (Department of Energy and Climate Change) to review tariff levels for the non-domestic Renewable Heat Incentive, announced on 31 May, has been welcomed by the Ground Source Heat Pump Association (GSHPA).
Speaking as the announcement was made last week, Energy and Climate Change Minister Greg Barker said: 'The Renewable Heat Incentive has been running for nearly eighteen months, so now is a timely moment to look again at the tariffs. We need to make sure they are set at the right level to continue bringing forward investment and growth and at the same time keep costs to the taxpayer to a minimum. That's what our proposals set out today are designed to do.'
According to the DECC, the proposed levels follow on from a review of the evidence base used to set tariffs earlier this year and are designed to increase uptake of heat pumps, large biomass and solar thermal technologies by increasing the tariff on offer.
A doubling of the small tariff and a tripling of the large tariff is what the Ground Source sector requires to get back on track, GSHPA says.
The association points out that the increased tariffs will address the current low levels of GSHP deployment and will provide the industry with the opportunity to grow the market significantly and implement the associated economies of scale.
GSHPA is also pleased with the increased level of the Value for Money cap. In a statement it said: 'Whilst recognising that budgets always have limits, it is important to implement a broad range of both heat and electrical technologies and this review recognises both budget limits and the importance of incentivising technologies that make a material difference.'
In addition, GSHPA says it welcomes the intention to pay out on all renewable heat produced by GSHPs: 'We will continue to work closely with DECC to develop the appropriate formula so that this policy can be implemented in full. The GSHPA is enthusiastic about the work covered so far with DECC officials on the new tariff levels, the Value for Money cap and paying out on all renewable heat produced and we now expect to see a restoration of growth in GSHP installations.'
Simon Lomax, GSHPA chairman, commented: 'This is great news for the industry and the country; significantly increased tariffs are just the boost the ground source sector needs. With these changes, we expect to see growth in ground source installations and the supply of much greater levels of renewable heat in Britain.'
