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BEAMA Welcomes Renewable Heat Incentive, but calls for ‘quick announcement’ of 2012 tariffs

BEAMA has welcomed the Government’s announcement of the new Renewable Heat Incentive (RHI) commencing July 2011. However, with some delays in clarity on the detail of eligibility and tariffs into the future, the association says there is a question mark over the impact it will have on the domestic market short term.

BEAMA Marketing Director Kelly Butler

There is also disappointment regarding the absence of commercial air to water heat pumps when they can simply satisfy the scheme requirements in the same way as ground to water types, along with the potential for customer concern at needing to return grant payments for RHI qualification.                                                                                                                                
For the domestic market the industry will certainly need firm details of 2012 tariff levels by the next heating season starting in September to enable the supply chain to sell the Year One ‘premium’ offer alongside on-going support. BEAMA Marketing Director Kelly Butler provides some perspective: “The renewable heat industry needed a good news story, and a new incentive is just what is required, but the devil is in the detail and long-term confidence is needed. “In principle, a Year One premium payment is an excellent theoretical bridge until the tariffs have been fully determined for domestic applications, but will customers see it as enough or will they need to know the tariff levels applicable from 2012? “Anyone selling heat pumps now has to sell a premium payment (more or less the level of grants available until 2009) with an unspecified tariff return from 2012.

The projected market in the coming year for heat pumps is around 20,000 installations and with Government planning to fund all technologies up to around 25,000 homes we need to keep a level head about what the market uptake will be. The industry needed a ‘game changer’ for domestic renewable heat and the setting of the tariffs from 2012 is now absolutely critical to pull customer demand. “There must be no delay in setting, and communicating, the tariffs from 2012. The May target date to set domestic eligibility has to be achieved. We will be pushing hard for firm tariff levels to be set for the domestic sector by July 2011.”      

Mr Butler added: “The October 2012 date is a crucial one and we are delighted with the signalled links to the Green Deal.  Bringing together the RHI with adequate tariff levels and the Green Deal may just be the action required to achieve that ‘game change’. The new announcements will undoubtedly raise the profile for domestic renewable heat, and for heat pumps the focus on off gas customers is an important step. We particularly welcome the emphasis on energy efficiency limits for eligibility, and it is now up to industry and Government to quickly nail down the detail and build the market.”

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