Revamped renewables subsidies could lead to poor choices

B&ES, RHI, Renewable Heat Incentive, Renewable Energy, Solar, biomass
Urging the sensible use of renewables —David Frise.

The launch of the domestic Renewable Heat Incentive (RHI), revamp of the commercial RHI and the ‘new look’ Green Deal offer tantalising business opportunities, but David Frise of B&ES warns contractors to proceed with caution.

Just when we thought this Government had fallen out of love with the concept of subsidising renewables it spruces up the Renewable Heat Incentive (RHI) and completely relaunches the Green Deal. We have seen a lot of chopping and changing over energy policy in the past few years, but the role of these two subsidies seems secure — for now at least.

The new Green Deal was launched despite the humiliation of the Advertising Standards Authority ruling that the Green Deal Finance Company had misled consumers. It remains true that many people would be better off financing energy-efficiency improvements themselves rather than applying for Green Deal funds — and the savings are most definitely not guaranteed.

However, many householders are likely to be attracted to the £7600 grants available under the new Green Deal Home Improvement Fund that came into effect in June. That sum would certainly make a dent in the cost of measures homeowners should be installing anyway and make the payback periods a lot more attractive. There were more than 22 000 Green Deal assessments carried out in April once news of the new funding was publicised.


Now the residential sector also has its own RHI, and the number of technologies supported by the non-domestic RHI has been extended to include air-source heat pumps, biomass combined heat and power (CHP), all anaerobic digestion plant (only plants under 200 kW were eligible before) and heating from waste.

New higher tariffs also came into effect for large biomass heating systems, deep geothermal heating, ground-source heat pumps and solar thermal water heating on 28 May 2014. The Department of Energy & Climate Change (DECC) is already reporting that the launch of the domestic RHI has had a knock-on positive impact on the non-domestic scheme, with the publicity reigniting interest among commercial building operators.

Currently renewables account for just 1% of all heating in the UK, and the Government wants to increase that to 12% by 2020. This is a very ambitious target, but this new enthusiasm for public subsidy should certainly push us in the right direction. However, inappropriate choices and poor quality installations could easily derail the whole strategy.

Quality-assurance schemes are in place, and all contractors have to be Microgeneration Certification Scheme (MCS) accredited, as do the technologies. However, there are still many examples of systems being poorly designed, badly installed, not commissioned properly — or simply not appropriate for the building.

Ground-source heat pumps (GSHPs) are a particular problem, with some having to be ripped out and replaced with air source units.

Consultants working for the Building & Engineering Services Association (B&ES) have analysed a number of installed systems and uncovered widespread lack of understanding of the technology and failure to calculate system capacities properly.

The loss of a third of a system’s capacity is not uncommon as a result of transmission losses as heat leaks away from poorly insulated pipework and plant components; this in turn leads to considerable problems with system undersizing. In some cases the B&ES team found losses as high as 45% of capacity through poorly insulated pipework.

Less complex and much cheaper air-source heat-pump systems can reach coefficients of performance (CoP) of between 3 and 3.5, which rival those claimed by ground-source systems, because they avoid transmission losses by delivering their heating load at the point of use.

Elsewhere some contractors have attempted to install heat pumps as direct replacements for gas boilers without taking into account lower flow temperatures and remodelling the system accordingly. It is also totally nonsensical to install electrically driven heat pumps in buildings that are on the gas grid. Switching out of gas to electricity, no matter how efficiently, doesn’t stack up in terms of cash or carbon.


There is plenty of potential in areas off the main gas grid, where around four million consumers are tied to expensive oil and LPG heating. Switching many of those to heat pumps or, in some cases, biomass makes better sense.

However, biomass has a far from unblemished record. As a result, installations now have strict new emissions standards to meet, and their fuel must come from a sustainable source and not lead to additional transport pollution. So, before designing a biomass system the specifier must consider issues like site access, fuel quality and transport feasibility.

Another concern is that many designers and installers continue to ignore the basic principle of the ‘energy hierarchy’ and, encouraged by the subsidies on offer, go straight for a renewable solution. Although the revamped RHI includes new energy-efficiency standards as part of the accreditation process, there is still a danger that the project will be very far advanced before the real performance figures are available.

How the Government web site promotes the substantial Green Deal grants for householders.

Basic, low-cost measures such as adding insulation and glazing to improve the thermal performance of the building fabric must come first to reduce energy demand before looking at how that energy demand will be satisfied. System components like heaters, valves and pipes should also be insulated as part of the initial programme.

Measuring and monitoring current levels of consumption is crucial because it is very hard to save energy if you can’t see what you are using. A strategic ongoing maintenance and commissioning regime should then be put in place to ensure systems continue to operate as intended.

Adding intelligent controls systems and sensors is a sensible second stage in the hierarchy, but this is also the time to look at how thermostats are set and whether systems will default to ‘off’. Changing pumps and introducing variable-speed motors are other relatively cheap measures that deliver a very fast payback.

Once all these things have been considered, then you can start to think about how renewable energy might fit into the building-services set-up. If you dive in at stage three, then you will only add an efficient-energy generator onto an inefficient building — driving up costs and disappointing the end user.

RHI payments to the end user, which are guaranteed for 20 years, depend on the data received from heat meters — another pre-requisite for an eligible system. Scheme administrator Ofgem reports that many meters are not properly installed and/or calibrated, particularly in complex systems. Failing to provide records of fuel use records and to allow for heat losses are other common problems that undermine RHI projects and leave end users disappointed by the return on their investment.


There are, undoubtedly, big business opportunities created by Government subsidies, but the industry cannot simply continue to do what it has been doing for 20 years and expect it to work with renewables.

In particular, we have to focus on how systems are integrating and how well they are being controlled — a single technology improvement will not deliver the performance goals required on large projects. We have to split the system into sub-systems and ensure each part is properly engineered and controlled.

Performance problems are rarely the fault of the individual technologies themselves, but how they are integrated, controlled and selected in the first place. That is a job for skilled engineers who have taken the trouble to invest in the right training and have consulted with the right experts.

Building-services contractors are eminently capable of rising to this challenge, but they mustn’t fall into the trap of thinking it is at all easy.

David Frise is head of sustainability at the Building & Engineering Services Association (B&ES).

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