The Domestic RHI has created a substantial opportunity for installers whose customer base covers substantial properties off the gas grid. These large properties – typically over 250m2 – benefit from DECC’s rather odd decision to offer an identical RHI tariff regardless of the size of the installation. Unlike the FiT, which recognised that a lower tariff should be paid to larger installations which benefit from a lower cost per installed kilowatt, the RHI tariff is consistent across all sizes and merely varies by the presumed efficiency of the heat pump installation. This inevitably favours larger dwellings, especially those who are fortunate to have land suitable for slinky installations or even a water source suitable for pond mats.
Larger properties are even more favourable where the heat pump can deliver the property’s entire heating requirement in accordance with MCS. This allows the system to receive the Domestic RHI tariff on the deemed energy consumption (kWh/yr) taken from the property’s Energy Performance Certificate, and provides an appealing return:
|Property Size (m2)||Peak Heat Load (kW)||EPC Heat Consumption||Renewable Heat (at 50C flow)||Tariff||Annual RHI Payment||Annual Running Cost Saving||GSHP Installed Cost||Counter-factual cost||Net Cost||Total RHI Income||Total Running Cost Saving||Internal Rate of Return (*)|
Of course wherever a back-up heating source is necessary the heat pump’s output must be metered, eliminating certainty, adding cost and requiring more on-going administration. Hence in such instances bivalent systems should be avoided if possible. And this is not always straightforward. Larger houses, often fitted with a single phase power supply, will routinely require a 16, 20 or 24kW heat pump, outputs typically beyond the capacity of most ground source heat pumps from the continent. Installing two heat pumps, or upgrading the power supply to three phase are possible but add considerable cost, ruining the rate of return!
So what’s the solution?
Fortunately, a growing number of manufacturers, including Kensa, are producing higher output single phase appliances. Kensa are the only manufacturer in fact who build a single phase 24kW ground source heat pump – the highest single phase unit on the market.
For greater hot water demand, Kensa’s High Temperature models and new Hybrid models deliver higher flow temperatures into the heat distribution systems to compensate for inferior insulation and air tightness specifications. The use of R134A refrigerant does have an impact on system efficiency but running costs, per kilowatt hour, will still be favourable against oil or LPG – and the Domestic RHI income will still cover the initial cost and generate a good return.
In summary, the RHI creates some appealing possibilities. Unlike the FiT-based technologies, which can only offer a projected income based upon the likely levels of sun and wind, the RHI income is certain whenever the criteria for the deemed approach is satisfied. And the payments will be made even if the heat isn’t actually consumed! Householders who winter overseas will still be paid!! Rates of return are enhanced by the use of low cost high output single phase heat pumps and will be especially generous if lower cost ground arrays can be used. The RHI might not work for everyone but it will certainly work for those installers targeting larger properties. And that has to be good news for contractors supported by knowledgeable manufacturers who can provide the necessary expertise to deal with large, complex properties.