The new RHI or Renewable Heat Incentive scheme, which was announced in March2011, has just announced that the first part is just for non-domestic applications. The key aspects are that the owner of the installation, or the producers of the biomethane for injection, are the people to whom the payments claimed are paid to, and payments will be made over a 20 year period.
For small and medium sized businesses both the installers and the equipment is going to have to be certified under the Microgeneration Certification Scheme, or equivalent standard. This is supposedly to help quality assurance and consumer protection but it will also put extra costs on to the boiler industry. While there may be an increase in business to the boiler industry, it will also provide a direct cost increase to the manufacturer with no direct recompense.
The compensation payments are calculated on tariff levels that are supposed to bridge the financial gap between the cost of conventional heat systems, and the renewable systems. In some cases there is due to be some additional compensation for certain of the technologies for an element of non-financial cost. All the heat output will have to be measured and recorded, and then multiplied by the tariff differences agreed.
Systems, which are eligible, or payments are those completed from the 15th July 2009. The amount of money for payment is limited, and there is going to be some difficulty in getting payments approved, as there will obviously be a good number of systems that can be claimed for retrospectively for systems already completed after July 2009.
There will be several concerns from the boiler industry in that the certification and the typical paperwork trail that is inherently built into these schemes are extra costs that will impinge on an already hard-pressed industry. The boiler industry has to develop and build new systems to use bio and other fuel sources, and whilst they are doing this now, the costs will increase and they will have to jump through more hoops.
There is a strong chance that the industry will not push forward as they should. Added to this problem is the fact that the scheme is to be administered by the Gas and Electricity Market Authority (Ofgem) who already come with a reputation for increased bureaucracy. Industry needs this to work well but the powers that be need to do some careful thinking.
Manufacturer of quality and high efficiency boilers, Alpha Innovation have provided reliable and efficient heating across the UK for over 45 years.
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