If the proposals go through, the internationally proven technology will be cut out of the Renewable Heat Incentive (RHI) entirely next year. This will be yet another cut to renewable energy subsidies after the influential House of Commons Energy and Climate Change committee heavily criticised the government for damaging investor confidence in UK energy infrastructure.
The proposal comes after repeated statements by Energy Secretary Amber Rudd that renewable heat is the major focus for UK renewables policy given the UK is off track on its 2020 renewables targets. In 2014 green sources provided only 4.8 percent of UK heating, which puts the country way behind its self-imposed target of 12 percent renewable heat by 2020. It also follows warnings by the Committee on Climate Change that greater effort is needed on renewable heat.
Solar thermal is one of the most established and accessible renewable energy technologies in the world with over 350 GW of global capacity. This is considerably more than the global PV capacity.
Solar thermal applications have expanded into space heating, community heating, district heating, hotels, hospitals and industrial processes. Solar thermal also works effectively alongside other renewables technologies.
“This proposal simply doesn’t make sense” said Paul Barwell, CEO of the Solar Trade Association (STA). “The government acknowledges the many benefits of solar thermal, yet proposes singling it out for the removal of financial support. With UK renewable heat deployment falling desperately behind target, government should be full square behind this technology as part of a strategic plan to permanently bring down heating costs for British families.”
Mr Barwell added that discriminating against this globally important technology in the UK would send a terrible message to householders, and would also have very serious ramifications for the British solar thermal sector. Manufacturers of solar thermal equipment, including cylinder manufacturers as well as installers, risk a full scale winding-up of their sector if this proposal goes ahead.
The STA are urging government to think again, particularly since sales enquiries are on the rise, as evidenced by the fact, for example, that the technology is popular with social housing associations in the UK to tackle fuel poverty.
According to Gordon Watts, Sustainability Manager at South Yorkshire Housing Association, the use of solar thermal panels to provide hot water in some existing housing schemes helps to keep customer bills down. Solar thermal and other renewables continue to be important options and continuation of the RHI and the Feed-in Tariff is important for solar thermal and other renewables until these markets are more fully mature.
The STA commented that the proposal is doubly surprising because of the government’s stated intention in the consultation to ensure less-able-to-pay households can benefit better from the RHI. Unlike other renewable heat technologies, solar thermal has negligible running costs, can be added to existing heating systems, and its performance does not depend on investing in a highly insulated house, making it particularly well suited to homes in fuel poverty. It also works effectively in built-up urban areas and on smaller roofs, broadening the opportunities for British homes to invest in renewables.
The proposals also put at risk precious domestic manufacturing in renewables as the UK has a number of excellent solar thermal manufacturers such as Viridian in Cambridgeshire, AES in Moray in Scotland, Thermatwin in Manchester and Solar UK in Sussex.
The UK solar industry is particularly aggrieved by the proposals, as the UK solar thermal market, which is dominated by domestic systems slumped during a policy hiatus lasting from 2010 to 2014. It was not until the first half of 2014 that the Renewable Heat Incentive was introduced for domestic solar thermal, by which time the market had halved in the UK, leaving the industry in a weakened position to promote sales. Analysis by the STA shows that there has been an 88 percent increase in monthly solar thermal sales enquiries amongst its membership compared to this time last year.
The justifications for removing solar thermal in the consultation proposal are weak, including survey results that show that most of the homeowners who have already installed solar thermal say they would have done it without any subsidy. However the relatively small size of the current market means that these survey interviews are not representative of a mass market – many homeowners who are currently choosing to go solar are not motivated by financial return.
Solar thermal is well established in colder and less affluent Eastern European countries because of its ability to provide effective renewable heating. For example, per capita, Poland has four times and Slovenia seven times the capacity of solar thermal than the UK. Germany has 20 times the solar thermal per head of population. Previous analysis by the Solar Trade Association has shown that while solar thermal is already relatively affordable, costs can be reduced significantly given a strong domestic market.
The Solar Trade Association is calling on the government to allow solar thermal to contribute not just to hot water but also space heating (such as central heating systems) and still qualify for the Renewable Heat Incentive, so that the technology can be combined with biomass boilers and heat pumps. The association believes that now is the time to ramp up support, rather than removing it.
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