Solar thermal scheme is no threat to PV in the UK


The U.K. government has announced the rollout of its renewable heat incentive (RHI) program to domestic properties next spring. The policy has been described as a necessary rebalancing of solar thermal and PV incentives rather than a boost for the former at the expense of the latter.

The U.K.’s Department of Energy and Climate Change (DECC) announced on Friday that its ‘world first’ RHI – launched in November 2011 for industry, business and public sector organizations – would be applied to households from spring 2014.

Under the scheme, households equipped with solar thermal, ground and air source heat pumps and biomass heating systems will be paid a tariff in line with the expected energy required for domestic heating of the property and based upon factors such as the number of occupants.

Solar thermal tops the tariff table with system owners guaranteed £0.192 per kilowatt hour ($0.29/kWh) per year over seven years and possibly more, pending the results of a review this autumn.

The good news for solar thermal installers does not mean the technology is being incentivized at the expense of PV, according to Stuart Elmes, chairman of the solar thermal working group at U.K. solar trade body the Solar Trade Association (STA).

"It is a rebalancing of the incentives in the U.K.," Elmes told pv magazine. "For years, solar thermal qualified for only a £300 grant whereas PV had much more generous incentives. For four years there has been a FIT payment for PV and almost nothing for solar thermal.

An incentive for combined systems

"But if the market is balanced, people will select the most appropriate technology for their home," added Elmes. "Because solar thermal systems occupy much less roof space and are less susceptible to shading, this policy should incentivize combined PV and solar thermal systems."

The STA has estimated the RHI could bring in anywhere from £1,150 for a single-person household up to £3,250 for a six-person household.

STA solar thermal spokesman Elmes, whose Viridian Solar company installs combined systems, told pv magazine the difference between the seven-year RHI payment and the 20-year PV FIT level was still arguably more generous towards PV.

"The government has calculated the nominal cost of a kilowatt hour of electricity from an offshore wind turbine over 20 years is 9.5p and has capped the RHI payments at that level. It reached the 19.2p figure because RHI will be paid over the shorter seven-year period," he added.

"If the 20-year PV FIT was calculated in today’s austerity environment it would probably be capped at that 9.5p level rather than the 14.9p currently available."