Long-term benefits expected

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1 Solar thermal UK Renewable Heat Incentive A backdating procedure will be put in place in the UK that will allow some solar thermal systems to be eligible from July Photos (4): Solar Design Company Long-term benefits expected What will the UK Renewable Incentive Scheme mean for Solar Thermal Businesses? In March 2011 the UK Government s Department of Energy and Climate Change (DECC) published details of their intended Renewable Heat Incentive scheme. The scheme will be phased in stages through to The Renewable Heat Incentive (RHI) scheme aims to help the UK achieve a target of 12 % of heat consumption from renewable energy sources by It is predicted over the next decade that this initiative will reduce carbon dioxide emissions by 44 million ton, although inevitably this will depend on which fuels are displaced. The RHI support is split into two application types: one set for households and one for commercial. There will be different tariffs based on generated heat for each of these. Before the household tariffs apply, some UK households will receive a small oneoff interim grant called the Premium payment. When finally the heat tariffs arrive, then a backdating procedure will be put in place to allow some solar thermal systems already fitted to be eligible from July For households these heat tariffs are not expected to be available until October Payments based on the awaited commercial tariff are not expected to begin until July 2011.The details of all the tariffs are still awaited but initial proposals for solar thermal suggest only smaller installations of less than 200 kw th will initially be eligible for the tariffs with these receiving per kwh generated. Larger installations will be considered after Tariff uncertainty Those who can engage the RHI in the first year of the RHI scheme will benefit from the tariffs for the next 20 years. For commercial premises the generated renewable heat will be paid according to a metered basis with tariff levels adjusted annually according to inflation. For households it is less clear how solar thermal heat will be measured. So in summary, the trade has some ideas of how the UK RHI heat tariffs will work 64

2 but not really enough to be sure. So the solar thermal industry again has to wait for the government to make up its mind. But how do representatives of the UK solar thermal industry react to the current information? Phil Hughes is the System Technologies Solar Thermal Specialist for Vaillant Group UK. He was asked if the RHI proposals will be enough to stimulate the solar DHW small/medium market. He responded that, at first sight the tariffs don t look inviting enough when compared to the higher FiTs and may not generate enough interest. However, when you sit down and look at the bigger picture and compare the return of investment against PV, solar thermal starts to look much more attractive. The difficulty is ensuring that end users see this message, not just the tariffs. High starting tariffs are required to generate early interest and get end users and installers on board. As the number of installations increases the tariffs will fall; the gamble is keeping the tariffs attractive enough to generate the number of installations required to meet the 2020 targets without the scheme costing too much to sustain the payments over the lifetime. With further positive comments on the RHI, Griff Thomas, Senior Microgeneration Advisor for ECA Certification (ELECSA), believed that the RHI is a world leading initiative which we are delighted to see being implemented; we are confident that this will grow the UK market and when the domestic rates are published will help to ensure the UK achieves our targets. Wasted heat Further optimism comes from Andy Pattison, Technical Services Manager at Kingspan Renewables. He stated that at Kingspan, we believe the RHI to be a welcome boost to the renewables industry, particularly at a time where cutbacks are rife; it offers muchneeded support to encourage a widespread uptake of renewable technologies, including solar thermal collectors. As a company that caters to the domestic sector, we do understand the mixed response that has been expressed so far. However, we firmly believe the government is serious in its approach to build the nationwide use of renewables in the fight against climate change, and look forward to the genuine potential for growth in this sector of the market. From the same company, we note that the importance of what and where the heat is measured in solar heating systems is critical. Russell Gore, Sales Manager, emphasised that for the forthcoming RHI tariffs there would need to be an owner s commitment to maintenance, and that system designs that permit heat dump or losses when the storage is under-sized should not be permitted. Returning to Andy Pattison, Technical Service Manager at Kingspan Renewables, believes in the RHI. Photo: Kingspan Renewables The SEIDO Line of Evacuated Tubes Affordable Aerospace Technology for--- Beijing Sunda Solar Energy Technology Co., Ltd. Tel: / Fax: info@sundasolar.com / sunda@public3.bta.net.cn

3 Solar thermal UK Renewable Heat Incentive initial proposals suggest only installations of less than 200 kw th will initially be eligible for the tariffs of 0.085/kWh generated. Phil Hughes of Vaillant Group UK, he believes that heat dumps are sometimes an evil necessity on solar systems to maintain system life expectancy, for example on schools that are closed for the hottest period of the year. Heat that is not used should not be metered or count towards the RHI payment. We should be working to remove the need for heat dumps by developing efficient seasonal storage to utilise the energy in times of lower solar contribution. Estimating or metering Russell Gore considered that the initial household Premium payment phase would in effect be an information-gathering period for the government before the tariffs are decided. It was important to him that the Premium payment phase was not simply a flat figure but one that responded to the different system performances. A simple example he gave would be the difference between flat plate and vacuum tube collectors. He thought that once household tariffs were in operation in It is critical to determine where the heat is measured in solar heating systems. 66

4 2012, each householder might potentially receive annually between 100 and 300 assuming they have a typical UK system of 2 to 4 m 2 SDHW collector system. It has been characteristic in recent years that the UK government renewable energy tariff measurement methods end up using a deemed method to estimate or simply guess the amount of displaced energy caused by solar. David Hood, a senior lecturer on the CAT MSc REBE programme, suggested that the announcement of the RHI has been a mixed bag. The shift in accepted technologies and the move away from deeming are welcome, although the delay in confirmation of the structure for domestic consumers and the potential issues related to metering have yet to be fully worked through. We await with interest forthcoming information from DECC, and hope there will not be significant delays in this. Returning to Phil Hughes of Vaillant Group UK: For most domestic installations I think deeming is the right choice. It helps prevent systems being purposely oversized in order to generate financial reward; however, it reduces the necessity of the end user to use the system efficiently to actually reduce CO 2 emissions. Solar thermal can t be treated the same as solar PV: we have no national heat grid to put surplus energy into if not utilised in the place of generation. The only government approved method for deeming solar thermal is part of a large calculation for households called the Standard Assessment Procedure (SAP). It is not applicable to commercial premises as it uses a hot water demand based only on floor area. Returning to Phil Hughes of Vaillant Group UK: The SAP calculation method is OK for most domestic systems. We know it s less accurate on larger systems and possibly they should be given the option to opt out of the deemed SAP method and adopt the metering approach used by the non- domestic installations. solar thermal systems will never be easy. We only have to ask a test centre what can go wrong with the accuracy even when just measuring steady state conditions. On this point, we asked Iain Summerfield of GASTEC at CRE to provide some technical details of the necessary metering especially for commercial RHI. He advocated that the meters should meet Class 2 Annex MI-004 of EU Measuring Directive (MID) for accuracy. However, these would need regular recalibration every few years or even to be replaced. He acknowledged that heat meters for solar thermal are difficult to select and locate due to the presence of glycol or water contaminates like minerals. He suggested that metering costs would be up to 25 % of the capital expenditure for small systems but less No change So the idea that solar heating systems will finally be obliged to fit meters under the proposed RHI is a crucial one. Industry insiders know that the metering of

5 Solar thermal UK Renewable Heat Incentive than 5 % of large systems. Costs would typically be 2 to 10/kW installed. Although the government intends that only commercial sized systems should be metered, he thought that household sized systems should be metered as well. The solar thermal industry already knows that there are many variables to consider by any deeming method: for example due to the wide variety of climate, systems types, heating and hot water loads. Returning to Phil Hughes of Vaillant Group UK, the position of the meter in the solar system is raised as the nearer it is to the collector then the higher it will read until eventually it fails dues to excess temperatures. His advice is that measurements should be close to the storage to help force the use of proper system design and optimisation of control settings. This would also help to ensure that pipe runs are adequately insulated and prevent issues with heat meters being too close to collectors during stagnation and being damaged by excessive heat or trying to measure vapour. Here we should remember that heat meters can easily be affected from internal ambient and other heat sources. Another key issue for metering heat is how the values are reported to the administrator. There is a choice of manual user readings which are cheap although more vulnerable to mistakes and fraud. A more automatic method will be to use mobile phone technology, GSM chips or even on the back of an existing DSL broadband connection; but all these can add a lot of expense. Chris Yates, the Deputy Director of the Heating and Hot Water Council (HHIC), argued that householders monitoring and recording of performance should be done electronically if at all possible; otherwise, manually recorded information will be inaccurate. This contrasts with Phil Hughes of Vaillant Group UK, who suggests that where a solar thermal system is installed that incorporates an intelligent controller that can monitor the amount of solar energy produced, this could be recorded at a monthly interval by the end user. This would need to be Residential house in Liverpool with a 3.8 m² flat plate collector that provides domestic hot water. backed up by a written questionnaire completed by the end user. Excluded collectors One controversial subject that the UK government has already landed in is the rejection of some forms of solar air collectors from the heat tariffs, even though there is a buoyant market for this technology in other countries. In particular, the transpired solar thermal panels first developed in the USA at the US Department of Energy s National Renewable Energy Laboratory (NREL) are excluded. Already solar air collectors have been modeled in simulation software such as T*SOL and RetScreen, so the trade knows that these systems can be measured and also deemed. It is also not clear whether heat intended for swimming pools, cooling or heating will be part of the tariffs. The theoretical basis of the RHI rests on the definition of renewable heat, where heat is initially generated using a renewable technology or source. The UK government defines this as equipment such as using energy from the sun, ground, water, sustainably-harvested wood and other plants, biogas and eligible waste streams. Under these definitions the decision to then exclude any solar thermal application appears bizarre. Apart from solar thermal, the following technologies will also receive funding: biomass boilers (including CHP biomass boilers ground source heat pumps water source heat pumps on-site biogas combustion deep geothermal energy from municipal solid waste injection of biomethane into the grid There are also a number of important hybrids which the UK government has not yet decided whether to support in the RHI such as solar assisted heat pumps or combined heat and power (CHP). What remains most mysterious is the current restriction on the availability of solar thermal tariffs to less than 200 kw th, since there is already plenty of data available from Europe on the costs and performance (see Where there is an artificial limit on size then the effect can be bunching, where sizes are only built just below the threshold. If the government has a genuine desire to increase renewable heating then how better than to support larger scale systems where the lowest production costs exist? Since this new peak power limit has appeared, the question is how this is converted into collector and storage tank sizes. The European industry already accepts a factor of 0.7 kw th /m 2 to derive the nominal peak power from the area of installed collectors but the UK government has not made clear whether this will be accepted. However, individual manufacturers test data sheets can provide some differences to this. In fact, there is not yet any definition for the clear distinction between household and 68

6 commercial as these will have different tariffs and schedules. For example, will a small shop be treated the same as a household? The quality assurance of the RHI refers to the Microgeneration Certification Scheme (MCS) which applies to installers and solar thermal collectors: in effect the Solar Keymark scheme. These two features essentially underpin the requirements of the RHI tariffs. Many existing users of solar thermal prior to the July 2009 backdate cut-off would also like the RHI rewards for the next 20 years. In theory they can if only the collector is swapped by an approved MCS installer, leaving the rest of the system intact. The system would still be required to meet the published installation standard MIS 3001 which even allows the storage tank to be completely heated by other heat sources. In fact, there is currently no overall minimum system performance for solar thermal required by the RHI in the UK. The MCS scheme and its documents are theoretically limited to only 45 kw th systems so the quality assurance for up to 200 kw th tariff is still uncertain. Chris Yates of the HHIC believes that the stated government target of 12 % of total heat consumption from renewable energy sources by 2020 is possible, but the right measures needed to be implemented quickly and effectively. Howard Johns, Chairman of the Solar Trade Association and his own company Southern Solar, refers to the long saga behind the RHI development and the frustrations of the industry. In an initial press release directly after the announcements in April 2011, Howard Johns questioned if the scheme would be viable at such low rates and commented that the RHI announcement really shakes the confidence of the industry in the commitment of the so called greenest government ever to deliver. Blame was also laid on the early report by the UK Atomic Energy Authority, UKAEA, which he described as flawed with its assumptions for solar thermal. In the end, the main threat to the success of solar thermal in the UK comes from the competition from the successful PV feed-in tariff (FiT). Here much higher tariffs are paid per kwh over 25 years which initially appeal to the consumer. Only if they are presented with a full economic calculation do they realize that much more capital investment is needed with PV for the same annual energy. The real problem is that the PV FiT is already launched, but for solar thermal there will still be a long wait. Chris Laughton Chris Yates, Deputy Director of Heating and Hot Water Council (HHIC), opts for electronical monitoring of performance Photo: HHIC