Industry calls for end to distortions in renewable heating market

Published:  20 August, 2012

UK: Industry has called for the Government to end distortions in the commercial market for renewable heating by allowing air-to-water heat pumps to compete fairly with other sources of renewable heat. 

The move comes following protracted exchanges of correspondence between Energy and Climate Change Minister Greg Barker MP and a coalition that incudes the Micropower Council, the Heat Pumps Association, BEAMA and the Heating and Hot Water Industry Council. These organisations called on the Government to stick to its original timetable to introduce a renewable heat tariff for air-to-water heat pumps in October.

Dave Sowden, chief executive of the Micropower Council commented: "We have confirmed with officials that the Minister has no legal reason why he cannot proceed this October without a further consultation. He now has more evidence on air-to-water heat pumps than any of the technologies already benefiting from the RHI. Our call is to apply a tariff to exactly the same formula as for the other technologies and the European Commission has told us it could process a properly completed State Aid application within two months.

"All we want is a level playing field for all renewable heating solutions. The Minister has not supplied any justifiable reason to continue with what is now a serious and harmful market distortion in what should by now be a flourishing commercial renewable heating market.

"There is no reason to U-turn on the previous commitment to include this important technology in October and hold up the rest of the scheme just because government has delayed the residential part of the RHI until next year."

Tony Bowen, president of the Heat Pump Association, added: "We have sought the inclusion of airsource heat pumps to rank alongside groundsource as vital links in progress towards a low carbon economy for a very long time. This delay is now incomprehensible and DECC needs to take prompt steps to end the current market distortion."

Kelly Butler, marketing director of BEAMA, pointed out that "successive governments have stated their aim to grow a sustainable renewable heat industry but the current RHI Phase 1 is effectively stifling any sustainable growth for airsource heat pumps. It excludes what is a valid renewable heat technology.

"Air-to-water heat pumps offer a great opportunity to meet our renewable targets and fit in with the Government's long term de-carbonised energy scenarios. To delay market support is setting the UK back in meeting its renewable energy and carbon reduction targets and puts the Government in the position of promoting anti-competitive policy-making."

Added Roger Webb, director of the Heating & Hotwater Industry Council: "There is no logic in continuing to exclude air-to-water heat pumps from the Government's Renewable Heat Incentive scheme. It creates confusion as to why some technologies are included and others are not. The HHIC believes that it is important to have a level playing field for all renewable technologies so that opportunities can be created."

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