RHI target – an unrealistic goal?

OFTEC awards 2014

Jeremy Hawksley, director general, OFTEC

Targets set out in the impact assessment produced by the Department for Energy and Climate Change (DECC) state that Renewable Heat Incentive (RHI) will support around 750,000 renewable heat installations by 2020 – that is approximately 10,800 new accreditations per month.

Latest figures from OFGEM show that since the RHI was launched in April, 5,158 renewable heating systems have been accredited under the scheme. At the current rate of take up, DECC’s goal of 10,800 new accreditations per month looks unrealistic.

According to OFTEC, a simple, all-inclusive boiler scrappage scheme would go much further than the costly and complex RHI in helping the government achieve its ambitious goal of 80% less carbon emissions by 2050.  This is because it would appeal to a far wider audience.

Jeremy Hawksley, director general at OFTEC, comments: “Even before the RHI was launched, we voiced concerns that the scheme would suffer the same fate as the Green Deal. RHI payments only come into play once the renewable heating system has been installed and the average consumer simply cannot afford to get started due to the high upfront costs of between £8,000 and £19,000 to install these technologies.

“Whilst we recognise that the initial take-up of any such scheme is often low and that momentum may build, there is going to have to be an enormous surge of interest in the RHI to meet government targets. We are doubtful that with such a costly and complex scheme this will happen.”

Jeremy Hawksley continues: “What the country needs is a simple, accessible scheme which consumers can really get to grips with. We already know that a boiler scrappage scheme works as a similar initiative in 2010 saw 120,000 old, inefficient boilers replaced.”

OFTEC’s concern about lack of interest in the domestic RHI is supported by a recent survey conducted by OFTEC and Watson Petroleum of 750 oil heated homes. This revealed that just 4% would consider switching to an air source heat pump, with 73% choosing to upgrade to a new oil condensing boiler.

Jeremy Hawksley concludes: “The government needs to think again and instead of pushing expensive renewables which will only appeal to the wealthy few, it should channel its resources into realistic boiler upgrade schemes that will encourage millions of home owners  to take simple yet effective energy efficiency measures which will collectively make a greater contribution to CO2 reduction targets.”

OFTEC’s view that only the relatively wealthy can afford the high initial investment. As such it’s clearly a regressive policy. This is important because rural dwellers and, by extension oil heating users, contain a higher proportion of people living in fuel poverty than the population as a whole. So the people who most need help to upgrade and improve their energy efficiency are effectively prevented from accessing RHI because the upfront cost is unaffordable – exacerbated because their homes are often difficult to improve. By contrast, the scrappage scheme that we advocate would be much cheaper both for homeowners and for government to implement and more likely to be successful as a result.

 

 

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