Greener households won’t recoup their outlay for at least three decades

Many homeowners across the UK who had decided to install ‘green heating’, so as to take advantage of a government reward scheme, have learnt that many of them are not likely to recoup their initial expenditure for over thirty years.

The scheme, known as the Renewable Heat Incentive, (henceforth the RHI), is to reward households for every unit of low-carbon heating, generated from a source of renewable or ‘green’ energy. This includes ground-source heat pumps, biomass boilers and the more popular solar thermal panels.

The scheme is now set to launch in the summer of next year, with subsidy payments to be made over seven years. This is despite the government’s original plans to get the scheme moving this October.

Homes currently heated by oil which feed off the gas grid will see their owners receive approximately £200 a month in payments from the RHI over the seven years, if they install a £3,000 solar hot water system. The upfront cost would thus be covered in roughly two decades, giving the ongoing £80 per year savings on bills.

Most homes, however, are presently heated by cheaper gas, and the proposed rates mean that these homeowners will likely see another ten years pass before they recoup their initial outlay – between the RHI payments and the savings on bills, they should recoup about £350 a year.

The chief executive of the Solar Trade Association, Paul Barwell, said that the organisation would be pushing for higher rates for their members, as the proposed tariff level was likely to cause concern.

Micropower Council have expressed a similar concern regarding some of the other renewable energy methods. Chief Executive Dave Sowden described the tariff levels for biomass as ‘problematic’ and said that the technologies would struggle to flourish whilst the returns were so inadequate in the eyes of members.