Being grateful for small mercies

The Renewable Heat Incentive (RHI) has received a less than ecstatic welcome from many quarters – the tariffs are widely regarded as too small to deliver the dramatic market shift the Government is looking for.

Come on – let’s get real for a minute.

Look at what has just happened to Feed-in Tariffs. The sound of squealing brakes is almost deafening as PV projects over 50kW are being pulled up short. Small residential projects are unaffected, but the big investments were pouring into solar farms and large ‘rent your roof’ schemes, suddenly, sustainability doesn’t look quite so appealing to the financial sector.

The FiTs powering large PV projects were offering an annual return of over 10 per cent – it looked to good to be true and it was. It is not hard to see why venture capitalists were pouring into this market and why they are now turning tail and stampeding back out again. This is all to do with economics and nothing to do with saving the planet – we need to be clear about this.

And, against that backdrop, take a look at the RHI. The Government needs to cut the deficit; there is nothing left in the public coffers and, yet, it is proposing to spend £860m of public money to try and create a £4.5bn market in solar thermal, biomass and heat pumps.

We should be grateful for small mercies and we also need to respond. Air source heat pumps are not included in the first round of RHI tariffs, but that is only because a perfectly good technology has not been delivering on its promise. Only 13 per cent of the systems trialled by the Energy Saving Trust matched expectations – due partly to poor commissioning; incorrect sizing; bad installation and confused user operation.

If we can get this sort of thing right, the RHI offers a huge opportunity for our sector. Let’s take the carrot, say ‘thank you’ and make it work for us, our businesses and our customers.

For full details of the RHI click here.

David Frise is head of sustainability at the HVCA whose members are committed to delivering high quality, responsible and sustainable building services solutions. dfrise@hvca.org.uk

Read more at www.hvca.org.uk

Picture Credit: http://www.flickr.com/photos/ell-r-brown/4366334742

Fields are for food, not solar panels

The Government’s decision to review the Feed-in Tariff (FiT) scheme is one of those classic cases of being damned if you do and damned if you don’t.

Having waited years for incentive schemes to help kickstart the renewables market while casting envious glances towards Germany, Portugal, and Spain; less than a year into our FiT programme it is all up in the air again. This breaks the Golden Rule of not moving the goalposts once you have put an incentive in place. However, there are mitigating circumstances here.

The FIT scheme was not intended to be an alternative to the equities markets, but to stimulate the generation of household renewable power. Climate Change Minister Chris Huhne is, rightly, concerned that the subsidies are, instead, making their way into the pockets of so-called “shrewd investors”. He has fast-tracked a review of the scheme and it looks as if arrays over 50kW will be made less attractive to investors after April next year.

This move is arbitrary, but is probably right if it stops people building solar farms in fields. We have so much roof space available we should be using that first.

Poverty
Food prices are on the rise and we are not able to feed the seven billion people in the world; let alone considering the additional two billion who will be around in 2050 (the equivalent of two Indias). The G20 countries are becoming increasingly concerned about food security – global poverty rather puts renewable energy arguments in the shade. So let’s keep the fields for growing food and fill up otherwise useless roof space with PV.

However, the Government now has to be very careful that it does not put the renewable energy market into reverse. More than 22,000 installations have registered for FiTs since their launch last April – hugely increasing our installed renewable energy capacity. The majority of the registered installations are individual homes and 95 per cent of them are using photovoltaic (PV) panels.

It is a tricky one for the Government, but whatever decision is taken it must communicate clearly where the strategy is going. The fact there is a review at all is increasing uncertainty about the whole FiT scheme. This has already driven some investors away and put the brakes on the smaller individual systems too. What the industry needs is a quick decision to remove the uncertainty.

The HVCA will be keeping a close eye on this and will continue to chase down answers from government and transmit them to members.

David Frise is head of sustainability at the HVCA whose members are committed to delivering high quality, responsible and sustainable building services solutions. dfrise@hvca.org.uk

Read more at www.hvca.org.uk

Picture Credit: http://www.flickr.com/photos/knowmybackyard/2394376192