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The Green Deal FAQ for Renewable Heating (Part 1)

The Domestic Renewable Heat Incentive has been launched on April 9 2014. Further details can be found on our RHI page. https://www.renewable-living.com/renewable-heat-incentive/

All payments of the RHI scheme are linked to a Green Deal assessment including an EPC that determines your end payment. At this stage many of the questions proposed have been answered in part. For an up to the minute discussed about the Domestic Renewable Heat Incentive, please contact us, or read our RHI page from the main menu.

 

The Green Deal was launched in October 2012 to commence in Early 2013. It is a package through which homeowners can borrow money to pay for home improvements that reduce their energy bills and the repayments are made through these repayments.

What has this got to do with wood pellet boilers, solar thermal hot water, or heat pumps?

The Renewable Heat Incentive has been promised to home owners since July 2009. The present government have been developing their proposals since they entered power and the Renewable Heat Incentive (domestic) will help homeowners, especially those off the gas grid to access renewable forms of heating. This could be biomass (wood pellets, chip or logs) boilers, solar thermal or heat pumps.

The current proposals suggest that homeowners will be paid over 7 years more than sufficient funds to pay for their installation of renewable heating.

The proposals state that in order to get the incentive the homeowner will have to have an assessment of their home done by a Green Deal Assessor and agree to making “Green deal-able” thermal improvements. For instance this would mean loft insulation to current building standards and cavity walls being filled.

Are all the measures finalised?

No!

This is still at consultation stage until 7 December 2012. There are a number of issues around qualification that are being debated.

  • If you have solid walls then it is probable that your savings from insulating the walls will not meet the Green Deal golden rule of being able to repay the Green Deal loan.
  • Energy Company Obligations is the name of a grant that is used to target the poorest and hardest to heat properties and this may link with the Green Deal to enable funding of more difficult properties.
  • Will the harder to heat properties “have” to make thermal improvements?
  • Will all improvements have to be made before the home can register for the RHI?
  • Will home owners who have installed since 2009 and through the Renewable Heat Premium Payments have to abide by the qualification criteria?
These are questions that we hope to have an answer on early in the New Year.

In addition there will be some concerns around the SAP 2012 data that will underpin the Green Deal Assessment

  • Currently wood pellets are cheaper in the market place than oil by about 20%. The projected SAP figures suggest that oil is about 4.64p per kWh – not really compatable with the 62p a liter from the “cheapest oil” websites. This figure may underpin SAP 2012 for the next 3 years until 2015.
  • Currently British Gas is offering gas at between 4.4 and 4.7p per kWh plus a standing charge of about 25p per day. This does not seem to be the same as the 3.37p per kWh in the SAP tables.
  • SEDBUK is the reference for gas and oil boilers. This is attached to most EPC programmes. There is no such database for renewable heating.

What does this mean?

SAP figures underpin the current EPC data and may well underpin the Greed Deal Advisor reports. In this situation the “Golden Rule” of loans from the Green Deal to be paid off through cost savings may be inaccurate. ie the report will reflect that moving to renewable heating is possible more expensive than it really is.

Whilst within SAP there is a way of using the manufacturers efficiency to complete the SAP report it may be more difficult for the programmes that use an approximation e.g. EPC or the RDSAP programme that is underneath it. Here there are no boilers to choose from and the result may be that the programme defaults to an “minimum” of 63-65% efficiency which is much lower than most accredited boilers perform. ie the report may favour boilers on the SEDBUK database as these will perform much higher as they are not minimum values. This will affect the EPC energy rating that the home owner receives.

The Green Deal report will produce projected savings on your home based on the data in the database. If energy prices are volatile and SAP data is produced every 3 years based on a historical 3 year average then there is room for the projected savings to be inaccurate.

For instance if you improve your cavity wall insulation any projected savings will be based on the heating bills the assessor thinks you have and will have. If you are currently on Gas at the moment then as the price of gas is currently more than the database then the savings will be more.

If you were considering changing from oil to heat pumps or biomass then the projected savings would also be based on the cost data. If the cost data shows oil is cheaper than wood pellets then your projected heating costs will be more.

SAP 2012 is currently in a draft state and we do not know what the final figures will be underpinning the new EPC’s. We also do not know how they will be updated to reflect current market conditions.

At this stage we would recommend finding out the real prices of fuel and therefore project your own costings. Any MCS accredited installer will help you understand how much of a fuel you will use and therefore project how you can save money moving forward.

The domestic RHI will help you move from fossil fuels to renewables such as wood pellets or logs. We project that our installations will offer the home owners excellent value for money against the RHI. We also know that wood pellets are certainly cheaper that oil prices currently. This leads to cheaper heating bills.

Home improvements to improve the thermal efficiency of your home are a good idea. It is quite difficult to project this accurately, however the Green Deal assessment is a way of ensuring that home owners do install loft insulation, cavity wall insulation where appropriate. This will also help you save money.

Summary

To take advantage of the domestic RHI you must be prepared to improve the thermal efficiency of your home. We do think that what the Green Deal and RHI offers are very good and can help you reduce your heating bills. We also recommend that you do your own calculations as a check.

 

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