Richard Paine, Product Manager for Domestic Heating and Renewables at Daikin UK, discusses the opportunities for the heat pump sector stemming from the updated Renewable Heat Incentive (RHI).
Following a significant consultation process, in December 2016 the Government announced the proposed changes to the RHI. The anticipated reforms plan to ‘boost the UK product supply chain and installation numbers’ of renewable heating solutions.
In an effort to increase the size of the ‘carrot’ available to property owners, the
air-source heat pump tariff has been increased by 35.5% from the current level of 7.51 p/kWh to 10.18 p/kWh. Allowing homeowners to claim significantly more funding for choosing renewable heating technology, all RHI applications made after 14 December 2016 are eligible for the new tariff.
Plans to introduce these changes in spring have been interrupted by the recent General Election, with the proposal yet to receive Parliamentary approval. However, the tariff increase is a clear indication of the Government’s support for the renewable heating technology.
Offering lower fuel costs and superior energy efficiency, heat pumps can reduce the impact of fuel poverty and support the UK in reaching renewable energy targets.
In a recent podcast, research and consulting experts Delta-ee said that the updated RHI is set to have the biggest impact in the private homeowner sector. Enabling homeowners to instantly benefit from reduced heating costs and Government funding, the updated RHI is set to catalyse the growth of the heat pump sector by attracting new customers to the technology.
However, for installers to truly capture the business potential of the reformed RHI, technical knowledge and awareness of the requirements for RHI applications is needed.
This is of significant importance as Delta-ee previously reported that awareness and education are the key drivers to increase the homeowner uptake of heat pumps. Detailed knowledge of the reformed RHI and its benefits alongside expert product insight can therefore lead installers to significant business growth.
Consider, for example, a typical 1930s three bedroom, semi-detached property that requires 18,000kW/hrs of heat. The increase in RHI funding equates to an additional £1,970 over the seven-year period, with RHI payments totalling £8,305.
It is important to fully inform customers of the RHI scheme rules. To be able to submit an RHI application, an air source heat pump that is Microgeneration Certification Scheme (MCS) accredited must be selected and installed by an MCS accredited installer. Furthermore, the RHI application must be made within 12 months of commissioning.
The timing of the application is also vital as the RHI reform makes electric metering for all heat pumps mandatory and puts in place a cap on annual payments for a single property. Limiting RHI payments to 20,000kWh for air source heat pumps, all applications made after the new tariff comes into effect will be considered inline with the new eligibility criteria.
To fully demonstrate the benefits of the RHI and renewable heating technology, installers should lean on the technical expertise, support and tools available from leading manufacturers.
Providing a host of free marketing materials, Daikin UK’s KEY Installer Scheme gives members exclusive access to extended product warranties, technical support, as well as industry and product focused training sessions.
Product focused training courses - such as the Daikin Altherma Monobloc LT heat pump installation course - support installers on their first steps into the industry, presenting the ideal stepping stone to larger units that require F-Gas qualifications.
Incorporating electric heat metering within the units, the MCS accredited Daikin Altherma heat pump range ensures it is as simple as possible for homeowners to claim RHI funding.
Furthermore, for installers new to renewable heating technology, the KEY Installer Scheme offers support and a discount when seeking MCS accreditation. Alternatively, for those without accreditation wanting to offer their customers the benefits of the reformed RHI, Daikin UK can recommend nominated MCS partners to ensure the true potential of the RHI is reached.
KEY membership also gives installers access to digital online tools, accessible onsite, which can provide instantaneous estimates of RHI funding, property heat loss, as well as technical support.
The RHI reforms are set to catalyse the growth of the sector and strengthen the supply chain. To reap the business opportunities expected from the increase in RHI tariff, installers should look towards leading manufacturers such as Daikin UK. Free- -to-use tools, marketing materials and manufacturer support can ensure installers are fully informed of the financial benefits of air source heat pump technology to attract new customers and grow their business.
For more information and to become a Daikin KEY Installer, visit: http://key.daikin.co.uk/