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Why the DECC’s new RHI ‘calculator’ doesn’t quite tell you all you need to know……

This week the DECC launched their RHI (Renewable Heat Incentive) ‘calculator’, with an aim of giving homeowners “a clear idea of the payments they could receive if they install a renewable heating system”.  So…. does it do this? Well, yes it does, albeit with some assumptions about your property and how you’re using it, but the user needs to be aware that it does not provide some key information which we feel homeowners should have visibility of before considering renewable or low carbon heating options.

To give an example of what we mean by ‘key information’ I decided to input the details of my own property into the calculator. It’s a mid-floor, 2 bedroom 1960’s flat with empty cavity walls and a fairly new and efficient gas combi boiler. Using the RHI calculator I was told that I could expect to receive a RHI income of around £5,500 over a 7 year period if I decided to dig up the communal gardens around my flat and install a ground source heat pump. (*Note: it does point out that I may need to get my cavity walls filled to qualify for the RHI – a good message, if not pretty tricky in my situation as a shared block).

The two main things which we feel should be highlighted to homeowners are:

  • There is no guideline cost range of renewable heating systems given by the calculator. A useful guide to these is given by the Energy Savings Trust. Taking their lower-end estimate of £11,000 for a ground source heat pump, this would mean that after receiving all of my RHI payments I would still be about £5,500 out of pocket, almost three times the cost of installing a new gas boiler.
  • In the DECC’s own words (but not pointed out alongside this tool incidentally) “people off mains gas have the most potential to save on fuel bills and reduce carbon emissions”. We would concur. Our analysis regularly shows that moving from a relatively efficient gas central heating system to some renewable heating options can actually result in increased running costs. Such a result would obviously be highly sensitive to both fuel costs and how the chosen system performs. As this is something which is not obvious to homeowners we feel that this is something the calculator should point out very clearly!

It’s a shame really as this calculator could actually be a useful service for homeowners but it seems more geared towards promoting the domestic RHI than actually providing measured guidance. We hope that systems do not get miss-sold as a result.