Rush for renewables as tariffs tumble

Yorkshire Heat Pumps has been in the press again this week talking about the quarterly rush to complete installations to beat RHI tariff degression.

Business Daily reported an update on the tariffs payable to homeowners under the govenment's Renewable Heat Incentive (RHI) scheme, and we talked about the impact on our business of the quarterly rush to complete installations before the tariffs come down.

This pattern has been repeated in the last two quarters as homeowners installing biomass systems have looked to complete their installations and submit their RHI applications before the tariffs fall.

Thus far it's only the biomass tariff that's come down, from a start point in April 2014 when the scheme launched of 12.2p/kWh, to10.98p/kWh in Jaunary, and it will be dropping again on 1st April to 8.93p/kWh.

Kate and Michael Wright of Yorkshire Heat Pumps

The scheme was designed to help homeowners recoup the installation cost of the renewable system over a 7 year period. At the outset, some people were even making a healthy return from the switch, but with tariffs tumbling, for many people, particularly those in smaller properties with lower heat demands, the RHI payments on biomass will no longer cover the cost of installation, however, coupled with significantly lower operating costs, this can still make economic sense.

For people in larger, perhaps less well insulated properties, with higher heat demands, RHI payments can still more than cover the cost of installation and give homeowners the additional long-term benefit of lower operating costs.

Tariffs remain at launch levels for ground source and air source heat pumps and solar thermal panels and will even see a small inflationary RPI increase from April. But with tariff changes directly related to uptake of each technology, it might not be long before we see tariffs dropping for these technologies too, so NOW is an excellent time to consider switching before they do.

You can read the story in full in the online Business Daily Environment section. 

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