Greg Barker Revises RHI rates for GSHP installations
from 21 January 2013

Ground Source Heat Pump RHI tariff expected to double

After many months of GSHPA lobbying of DECC, including a meeting with Greg Barker on 17 December 2012, DECC announced on 21 January 2013 that:

"particular concerns have been raised about the very low uptake of RHI for ground source heat pumps and some of the assumptions underpinning the current tariffs.

Emerging evidence suggests there may be differences between actual costs and load factors of installations and the original assumptions used to calculate the current tariffs. After the work has finished a summary of the findings will be published.

Following the outcome of this work, if the evidence demonstrates that the initial assumptions and cost data need to be updated, subject to value for money considerations and the necessary approvals, DECC will consider proposing tariff changes for new installations in the Spring. It is DECC's intention that where tariffs increase as a result of this work, installations accredited from today (21 January) would benefit from that increase once the new tariffs come into force".

The GSHPA had already presented DECC with robust evidence that supports an RHI for ground source heat pump installations of 9.4 pence/kWhour. The original RHI tariffs for ground source heat pumps were:

GSHPA welcomes the news that DECC is now able to recognise that the rates for GSHP installations will change and be effective from 21 January 2013. This will allow ground source installations to be installed and allow the RHI to achieve some of its most basic aims.

See the DECC announcement of 21 January 2013.

See the GSHPA Press Release of 24 January 2013.

Early Tariff RHI Review – published 31 May 2013

Having received all the evidence that RHI is not supporting ground source energy – uptake has been only 1% of the government's own estimates – DECC has published its Early Tariff Review in May 2013. The welcome proposal is to double the tariff on smaller systems and triple the tariff on larger systems.

However, DECC prolongs the uncertainty and proposes a delay until Spring 2014 before these proposals are implemented. Once agreed accreditations from 21 January 2013 will be entitled to the revised tariffs.

Timing of changes

The commitment of the Minister, Greg Barker, to increasing the tariffs for the Commercial RHI for GSHPs has repeatedly been made clear, including in Greg Barker's video address to the Ground Source Heat Pump industry on 27 March 2013. He has also confirmed that the increases will take effect from 21 January 2013.