British building owners can now make money by generating renewable heat

The first scheme in the world that will pay owners of domestic buildings for generating renewable heat has been launched in the UK by Energy Minister Greg Barker (seen right with MP Chloe Smith opening a 'Mr Renewables showroom' at the beginning of April).

Like feed-in tariffs for generating renewable electricity from technologies such as photovoltaic solar panels, the financial incentive scheme offers householders a fixed amount per kilowatt-hour generated from various technologies, even though the heat is only consumed in the home and not made available for others (as with home-generated electricity that is fed into the electric grid).

Called the Renewable Heat Incentive, it is based on a similar scheme for business, the public sector and non-profit organisations, that has been in operation for some time in the UK, as well as a smaller domestic scheme aimed at solid-walled, hard-to-heat homes, called the Renewable Heat Premium Payment.

Property owners apply to all schemes through the Energy Saving Trust, a government-sponsored body which promotes energy efficiency and renewable energy at the domestic scale.

The purpose of the RHI is to stimulate the renewable heat industry in the same way that feed-in tariffs have done for the solar PV industry. This has seen remarkable growth in the last four years with the cost of a typical PV system installation dropping by more than half.

The UK Government and industry body the Solar Trade Association (STA) have a target of covering over one million roofs with solar thermal and solar PV panels by the end of 2015. Over 200,000 solar thermal systems are already installed in the UK.

Global capacity for solar thermal is over 200GW - around double global installed capacity of solar power. The technology is proven and well established across Europe and elsewhere, and back in the days of previous support systems when grants were offered for installation of many types of renewable energy technologies, solar thermal was by far the most popular technology of choice for householders.

Stuart Elmes, Chair of the Solar Thermal Working Group at the STA, welcomed the launch of the RHI, saying: “Solar heating is popular with householders and quick to install, integrating easily with existing heating systems. We calculate that the returns from solar water heating are similar to those from solar power when you take into account the high price inflation for gas and heating oil.”

Paul Barwell, Chief Executive of the STA said: “With the launch of the Domestic Renewable Heat Incentive the final piece of support for household solar technologies slots into place. Together with the Green Deal for insulation improvements and the Feed-in Tariff for solar power, householders now have a great choice of Government-backed financial incentives to choose from to best suit their clean energy needs.”

Launching the scheme, the Government Minister for Energy Greg Barker (pictured right) said: "Not only will people have warmer homes and cheaper fuel bills, they will reduce their carbon emissions, and get cash payments for installing these new technologies. It opens up a market for the supply chain, engineers and installers – generating growth and supporting jobs as part of our long-term economic plan."

Technologies and payments

The technologies currently covered by the scheme are:

• Biomass heating systems, which burn fuel such as wood pellets, chips or logs to provide central heating and hot water in a home. Biomass-only boilers are designed to provide heating using a ‘wet system’ (eg through radiators) and provide hot water. Pellet stoves with integrated boilers are designed to burn only wood pellets and can heat the room they are in directly, as well as provide heat to the rest of the home using a ‘wet system’ (eg through radiators) and provide hot water.
• Ground or water source heat pumps, which extract heat from the ground or water. This heat can then be used to provide heating and/or hot water in a home.
• Air to water heat pumps, which absorb heat from the outside air. This heat can then be used to provide heating and/or hot water in a home.
• Solar thermal panels, which collect heat from the sun and use it to heat up water which is stored in a hot water cylinder. The two types of panels that are eligible are evacuated tube panels and liquid-filled flat plate panels.

Technology	Tariff
Air-source heat pumps	7.3p/kWh
Ground and water-source heat pumps	18.8p/kWh
Biomass-only boilers and biomass pellet stoves with integrated boilers	12.2p/kWh
Solar thermal panels (flat plate and evacuated tube for hot water only)	19.2 p/kWh

Only one space heating system is allowed per property but homeowners can apply for solar thermal for hot water and a space heating system.

The guaranteed payments are made quarterly over seven years for households in England, Wales and Scotland. (Northern Ireland has its own RHI scheme). The scheme is designed to bridge the gap between the cost of fossil fuel heat sources and renewable heat alternatives.
According to renewable energy expert Richard Hiblen, who has more than 14 years’ experience in this field, the RHI tariffs are ‘good for some and better for others’, but even the worst figures make the technologies more attractive than installing oil or LPG heating.

Phil Hurley, managing director, NIBE Energy Systems Ltd., a renewable heating manufacturer, called the RHI "a game changer for the renewable heating industry". He continued: “The introduction of the domestic RHI gives the industry the security and confidence it needs to realise its growth potential".

But Neil Schofield, Head of External and Governmental Affairs at boiler (furnace) manufacturer Worcester, Bosch Group, cautioned that: “the funding is weighted heavily in favour of biomass, which is one of the most expensive systems to install and one requiring the largest amount of user intervention. Questions have already been raised over whether DECC has backed the right horse in this respect."

UK Solar Strategy

Earlier this week, the UK Government also launched its Solar Strategy, which contains plans to turn the Government estate as well as factories, supermarkets and car parks in cities around the UK into “solar hubs”.

Energy Minister Greg Barker  said he believes that “there is massive potential to turn our large buildings into power stations and we must seize the opportunity this offers to boost our economy as part of our long term economic plan. Solar not only benefits the environment, it will see British job creation and deliver the clean and reliable energy supplies that the country needs at the lowest possible cost to consumers.”

The UK has an estimated 250,000 hectares of south-facing commercial rooftops, and the government believes that solar increasingly offers efficient and cost effective onsite generation opportunities to both businesses and domestic consumers.

In a further initiative, the Department for Education is working on ways to improve energy efficiency across the 22,000 schools in England, to reduce their annual energy spend of £500 million, and to encourage the deployment of PV on schools alongside promoting energy efficiency. The British Education Secretary Michael Gove said: “Solar panels are a sensible choice for schools, particularly in terms of the financial benefits they can bring. It is also a great way for pupils to engage with environmental issues and think about where energy comes from.”

Renewable Heat Incentive launch set for next Spring

Solar thermal is one of the most affordable renewable technologies and the Solar Trade Association is looking forward to boom time.

Details of the domestic Renewable Heat Incentive (RHI) and related tariff levels have been announced by the Department of Energy and Climate Change (DECC), but anticipated news about the future of the non-domestic RHI has been postponed.

The domestic RHI will launch next Spring. As has always been promised, anyone who has installed a system since 15 July 2009 can claim retrospectively, as long as they meet the Microgeneration Certification Scheme (MCS) standards that applied at the time of installation.

DECC has confirmed the tariff levels for all four eligible technologies. These will be:

• Flat plate and evacuated tube solar thermal panels: at least 19.2p/kWh


• Ground (and water) source heat pumps: 18.8p/kWh


• Air to water heat pumps : 7.3p/kWh


• Biomass-only boilers and biomass pellet stoves with back boilers: 12.2p/kWh.

Payments will be made on a quarterly basis over a period of seven years. Householders who have already received vouchers under the Renewable Heat Premium Payment scheme will be transferred to the RHI and have their value deducted from their RHI payments.

Applicants will need to complete a Green Deal assessment to reduce their energy demand to a certain level in order to qualify for the payments.

Private landlords and providers of social housing will be able to apply for a property or properties that they own (provided they own the heating system). The landlord will receive the RHI payments.

For Local Authorities who use Arm’s Length Managed Organisations (ALMOs) to manage their properties, the application must come from the owner of the heating system.

New build properties will not be eligible for the scheme. The Renewable Energy Association said this "reinforces the need for the government to set demanding carbon compliance standards in the 2013 revision of the Building Regulations Part L, due for imminent release by DCLG".

People will not be able to claim for more than one space heating renewable heating system in the same property, with the exception of installations of solar thermal and another eligible technology.

Climate change minister, Greg Barker, said: “Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the coalition is 110% committed to boosting and sustaining growth in this sector.”

DECC gives an example of what an installer might receive, in the case of a biomass boiler which might cost, say, £8,000 to install. In a year, the estimated heat use could be around 15,000kWh, which, at a 12.2p/kWh tariff, would result in a payment of £1,830. This would mean it might pay for itself in around five years.

New installations of biomass systems will need to meet air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx).

Ofgem will be responsible for administering the scheme when it launches.

The RHI is funded directly from Government spending and has been given annual budgets. There are worries that, as with the payments for Feed-in Tarriff PV systems, they might unexpectedly decrease in the future. DECC will make an announcement on this around the time of the launch.

The news was welcomed by trade body the Heating & Hotwater Industry Council, whose director, Roger Webb, said: “it gives the industry confidence to invest in renewable heating products helping to protect and create jobs. We would of course like the tariffs to be higher but we understand the difficulty of introducing a government funded scheme in the current economic climate," he added.

"We will also be urging DECC to monitor uptake and if necessary to increase tariffs if they are not driving up product sales.”

Stuart Elmes, Chair of the Solar Trade Association's solar thermal working group, called the announcement “a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world. From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

Solar thermal is one of the most affordable renewable technologies for homeowners, with a typical system costing around £4,500. This includes the replacement of an old hot water cylinder with a well-insulated solar cylinder.

Solar thermal systems are relatively small and appropriate for partially shaded roofs or those with limited space. A typical system will provide over half the hot water needs of the average home.

Paul Barwell, Chief Executive of the STA, said: “This announcement today is a major success for the STA. Our team has worked very closely with DECC over an extended period in an effort to ensure that the benefits of solar thermal are adequately recognised in the domestic RHI.

"In particular we have helped to drive a deeming calculation based on true occupancy that better reflects hot water usage in the home. The exceptional technical expertise of Stuart Elmes has been invaluable to our efforts.”

Ground source heat pump manufacturer Kensa's Managing Director, and Chairman of the Ground Source Heat Pump Association, Simon Lomax, said that the "Domestic RHI announcement made today, three and a half years after the initial consultation, is disappointingly short on detail."

Tim Minett, chief executive of CPL Industries, a supplier of biomass systems and wood pellet distributor, said he was “surprised the Government is offering more for other technologies but still expect biomass systems will be the most popular by far.

"They are the easiest to retrofit to properties, simple to use and work in all weather conditions – a big factor in the UK – while 12.2p/kWh will cover the cost of installation, lower people’s fuel bills and provide regular income for years to come. What’s not to like about that? “The domestic RHI should be hugely popular as a fifth of the UK’s housing stock is not connected to the gas grid," but he added, "the chief stumbling block is lack of awareness among the public so what we desperately need now is for the Government to step up and promote the scheme vigorously.”

Brian Smithers, European Director, Rexel, agreed, adding: "it is also in the industry’s interest to drive awareness by educating consumers".

Non-domestic RHI decision postponement

At the same time as making the announcement about the domestic RHI, the Government said it was delaying a decision on expanding the non-domestic RHI scheme, which has been operating for over two years, until the autumn, a full year after the proposals were originally released in September 2012.

Industry response was to express disappointment. The Combined Heat and Power Association said the continuing lack of clarity and certainty is "unhelpful for the hundreds of millions of pounds of renewable heat projects currently under development".

Last year the CHP industry welcomed the proposals to expand the RHI scheme to include tailored support for heat produced from biomass and bioliquid CHP. The proposals highlighted recognition within Government that biomass CHP is the most optimal use for limited biomass resources.

Dr Tim Rotheray, Head of Policy and Communications at the CHPA said: "It is absolutely crucial that the Government now provide clarity and certainty. The Government’s proposals for a CHP-specific rate under the RHI is driving renewable heat projects around the country, and a clear, quick decision will help lock in these investments, lock in the jobs these investments will provide, and lock in our ability to meet our renewable heat targets with highly efficient renewable CHP.”

He did, however, welcome the boost to investor confidence given by the Government's decision, also just announced, to grandfather existing renewable CHP schemes from changes to its quality assurance programme.

The biofuel-industry trade body, the Renewable Energy Association, called the delay "disappointing", but welcomed the announcement on the domestic RHI.

The same response came from the Anaerobic Digestion and Biogas Association's chief executive, Charlotte Morton, who called it "very disappointing for AD developers and operators. Making good use of heat from AD plants makes sense for operators, and will help the government deliver renewable energy targets," she added.

"The (non-domestic) RHI is currently well below its projected budget and another delay will simply make it harder for our members to deliver the projects government wants to see.

"DECC could help resolve this by giving developers clarity over the eligibility date, which would allow projects to start generating and using renewable heat if they have commissioned their plant within a set period," she concluded.

Scandal of the unclaimed renewable heat grants

Only one solar thermal installation has so far been completed under the Renewable Heat Incentive.

Only half of the grants offered by Government to businesses and councils to install renewable heating schemes are being claimed.

One of the main reasons appears to be lack of publicity, but the grant conditions also are claimed to be too tight.

Under the Renewable Heat Incentive, businesses and public sector bodies can claim a subsidy for every unit of power generated from technologies such as solar water heating panels, biomass boilers and heat pumps, in the same way as can be claimed for renewable electricity under the feed-in tariff scheme.

The first tranche of the scheme, launched last year by the Department of Energy and Climate Change (DECC), was underspent by 50%: £5.5 million of the £10.8 million budget was unclaimed. According to Ofgem, just 176 schemes are receiving payment, a pitifully small number.

The second stage, worth £7 million was launched in March, and the latest figures show a total of only £817,250 claimed. The vast majority of these are for solid biomass boilers.

If this rate of uptake continues until the scheme closes in March 2013, just £3.9 million will be spent.

New figures, released yesterday, show that DECC's current estimated expenditure for 2012/13, based on the total number of RHI applications received to date, is £18 million. The cap on spending is £70 million. At this rate DECC estimates only £42 million will be spent.

As the figure is based on applications rather than fully accredited installations, the eventual figure is likely to be lower.

The Renewable Energy Association's head of policy, Paul Thompson, said the difficulty in giving away the grants is due to three factors, all decided by DECC: the time-limit, the lack of publicity, and the small amount of support on offer, which, he said was “not enough money to influence people's decisions".

He said: "You've got to have a bright idea that's pretty much developed to be in a position to be able to meet the deadlines".

He called upon DECC to use unspent funds to run a publicity campaign. The Department is currently deciding what to do with unspent funds from the social landlord's scheme.

DECC also launched an £8 million competition for community groups on 24 July, to install renewable heating. Grants up to £160,000 are available but applications must be in by 7 September, which is too early for some groups to manage. In addition, the completion schedule is tight: projects have to be completed by the end of the financial year.

EU targets dictate that 12% of the nation's heating needs to come from renewable sources by 2020, an increase of 2.2% on 2011 levels.

What is mystifying is the lack of installation of solar thermal. In the previous support system run by DECC, solar water heating was by far the most popular technology. It has proved to be very successful in this country, much more so than solar PV in terms of value for money.

In fact, renewable heat in general it is more cost-effective than renewable electricity, at a small scale.

Yet the Ofgem figures show that there has been just one solar thermal scheme supported under the RHI. The full figures are:

Technology Type	No of accredited installations / Registered biomethane producers	Installed Capacity (MW)
Biogas	1	0.113
Solid Biomass Boiler	162	6.02
Deep Geothermal	0	0.000
Ground Source Heat Pump (GSHP)	11	0.378
Municipal Solid Waste	0	0.000	Solar Thermal	1	0.008
Water Source Heat Pump (WSHP)	1	0.024
Bio-Methane	0	0.000

At the end of July DECC also published new regulations that introduce the stand-by mechanism for budget management to the RHI Scheme, part of the impact of which is to introduce an immediate change for biomethane producers who wish to register for the Scheme.

DECC's current consultation on the Renewable Heat Incentive long-term budget management has, as its preferred option, gradually reducing the tariff levels for new installations if deployment levels exceed forecasts.

On current trends, that is not likely to happen, and there could well be a third renewable heat underspend by the Department.

One would be forgiven for wondering if this is part of a deliberate pattern.

£10 million for renewable heating for social housing tenants

Social housing landlords can now apply for grants of up to £175,000 to install solar hot water panels, heat pumps and biomass boilers into the homes of their tenants.

It follows the launch of a second round of the Renewable Heat Premium Payment (RHPP) scheme by the Department of Energy and Climate Change (DECC), with a total budget of £10 million.

It is expected that around 60 projects will win funding across England, Scotland, and Wales. Good news as it is, the budget will only benefit about 5,000 individuals, however, just 0.1% of the 3.9 million who live in social housing. The vast majority of these households live in fuel poverty and would welcome this type of help.

A further scheme targeted at communities who want to develop district renewable heating schemes will be launched later in the summer; interested participants can register for details here for when the announcement is made.

The closing date for applications for this round is July 4 and it is running on a first-come first-served basis; once the budget for the scheme is reached then applications will no longer be considered.

Eligible technologies include biomass boilers, solar thermal panels, ground source heat pumps, air-to-water heat pumps and water-to-water heat pumps.

“Last year our low carbon heating scheme for social landlords helped nearly 1000 householders stay warm and reap the benefits of clean, green heat,” said Energy and Climate Change Minister Greg Barker. “This year we have increased the cash available, which will help even more people move away from expensive old heating systems to low carbon, more sustainable alternatives.”

In the opening round last year, 37 social housing providers received a total of nearly £4.4 million. Only two of these were in Scotland and three in Wales. The rest were in England. One social landlord, New Linx Housing Trust, even received two grants. Just eleven received the total amount possible of £175,000.

Air source heat pumps were the most popular technology, probably because they are easiest to install. They represented 35% of installations, with solar water heating systems coming second at 33%. 19% of installations were ground source heat pumps and just 13% biomass boilers.

However, there are question marks over the efficiency of air source heat pumps compared to other forms of renewable heat.  In some circumstances they can cost more and emit more carbon than the form of heating that they may replace.

The scheme was welcomed by Philip Sellwood, Chief Executive of the Energy Saving Trust, which manages it and will evaluate the bids for funding. He said that it “offers real value to tenants as not only does it help them save money on their energy bills, but also helps them to reduce their energy usage”.

Criteria for funding include value for money, the type of fuel being replaced (with high carbon polluting fuel favoured), the presence of loft insulation to 250mm and cavity wall insulation (where practical), and the organisation's track record on delivering similar projects.

Those who have recently removed a mains gas heating system or currently heat their home with mains gas are only eligible to apply for solar thermal.

The amount of funding depends on the type of technology to be implemented:

Technology	Voucher Value
Solar Thermal Hot Water	£300
Air-to-Water Heat Pump	£850
Ground-Source or Water-Source Heat Pump	£1250
Biomass boiler	£950

Vincent Wedlock-Ward, Project Officer at Southern Housing Group (Isle of Wight Region), a previous social landlord competition winner, said that they received £175,000 from DECC under last year’s RHPP scheme. "This helped us replace old overnight storage heating systems with air source heat pumps for 40 householders living off the gas grid. Without this funding, this would not have been possible".

She reported that residents with the air source heat pumps fitted have found that their bills have been cut by half.

A programme of seminars is touring the country to explain what the scheme entails to local authorities and housing associations.

There is also an advice line on 0800 512 012 for more information. Winners will know whether they have been successful in early August.

Government should think again about supporting air source heat pumps

Last week, a company that installs air source heat pumps was censured by the Advertising Standards Authority for making misleading claims about this technology. But is the Government itself guilty of the same sin?

In a mailshot, ACS Renewable Solutions had said that its air-source heat pumps could "reduce winter fuel bills by 40%", and that they are "over three times as efficient as a traditional heating system".

Energy supplier Calor Gas challenged these and three other assertions, and three of its challenges, relating to winter fuel bills and efficiency, were upheld by the ASA.

Given that off-gas-grid householders are currently able to apply for £12 million-worth of Government £850 vouchers under the Renewable Heat Premium Payment (RHPP) scheme to buy air-source heat pumps, suppliers are falling over themselves to offer the devices.

The RHPP will be replaced from autumn 2012 by the Renewable Heat Incentive, which will pay a fixed tariff for heat pumps, depending on how much heat and hot water they produce.

Ground and water source heat pumps will be eligible for the RHI provided they have a coefficient of performance (COP) of 2.9 or above; this will usually be part of the equipment documentation supplied by the manufacturer.

Some feel that sellers like ACS should not be able to claim that heat pumps are a renewable source of energy. After all, they require electricity for the pump to work, which may not itself be renewable.

The argument is that the heat they pump - from the ground, water or air - is renewable however, as it is ultimately heated by the sun. They are classed as renewable in the EU's Renewable Energy Directive for this reason.

It is right that air source heat pumps will not be supported by the RHI at least to start with, pending further research by the government to better understand the costs, real world performance and benefits. The government will announce the result of the research and how much support will be given in a year's time.

But they need wait no longer for some vital clues. Installers and potential customers now have the benefit of peer-reviewed analysis conducted for the Association of Energy Conscious Builders by the veteran of the industry, John Cantor.

John has been working with the technology for 30 years and no one knows how heat pumps work better than he does.

The first point he makes is that the real value of a heat pump is given not by its COP – which is measured in laboratory conditions - but by its SPF (seasonal performance factor). This is the total useful annual heat produced divided by the total electrical input.

For the SPF, 'real world' measurements need to be done, and these are much harder to standardise.

Crucially, this should include any direct electric 'top-up' heaters which might be necessary to cover any short-fall in the heat output, or to elevate the hot water cylinder temperature.

The new report says that an SPF of 4 is certainly achievable for space heating with a good GSHP (ground source heat pump), connected to a well designed underfloor heating system in an insulated building.

But for ASHPs (air source), results of trials conducted last year by the Energy Saving Trust showed that of 22 evaluated, half fell within the range of 1.6 to 2.2, with one as low as 1.2, and only one achieving a measured efficiency of 3.

This report has been widely interpreted to mean that ASHPs are best avoided. But Cantor's analysis says the EST's results are not the end of the story.

Firstly, he criticises the poor quality of many system installations of heat pumps in the UK (they're better at it in Germany). Installation requirements for heat pumps are "exacting", and the industry is on a learning curve.

This means that if ASHPs ever do get support from the RHI, then installers who want to be accredited under the MCS should have to pass strict tests to make sure they do install them properly.

Secondly, Cantor says that EST should have measured the seasonal performance factor, SPF, not the COP.

Any heat pump, he says, is very sensitive to the way that it is utilised. Its real-world performance will only be as good as the system it is part of.

"A heat pump only has a potential efficiency. The actual performance is that of the entire system, of which the heat pump is only one element," Cantor says.

His best guess for the efficiency of an ASHP installed in the UK is an average SPF of around 2.6. In a new-build dwelling, with a lower heat load, and more freedom to specify a heat-pump friendly system, it might be reasonable to expect SPFs of around 3.0.

The key difference between a heat pump and any other heating system is that a heat pump's energy efficiency is affected greatly by the temperature difference between the source and heat sink. It is at its most efficient when heat is supplied at a relatively low temperature.

If the pipes from the heat pump are hot, the COP is likely to be low, while a heat pump operating at a very high COP will have relatively cool pipes.

An ASPH is not a replacement boiler. You can't expect it to supply heat at 70°C for central heating or 35-40°C for the taps. It works best with ambient, or underfloor heating.

It will also operate at its lowest efficiency - reduced by a third - when we need the most heat – when the air is coldest.

Since the COP of most ASHPs will approach 1.0 when integral direct-acting electric heaters (if fitted - they help defrost the pipes) are engaged, at times of extreme cold and peak demand on the grid, they may pose a real problem if they are large numbers installed in the future.

Ground source heat pumps are around 20% more efficient at these times.

It seems that the Government might be anticipating 150,000 new ASHP installations by 2030, and 425,000 by 2050 (cited by National Energy Action in their paper 'ASHPs – assessing the impact for the electrical distribution system').

And here is the killer argument against air source heat pumps.

Many of these installations might be expected to be replacing gas boilers.

Gas boilers in the home are up to three times more efficient in their use of carbon than electricity supplied to a home from a gas-burning power station, due to inefficiencies in the combustion process and transmission network.

Therefore, there will be no carbon saving, and even a possible increased carbon cost, from installing an air source heat pump to replace a gas boiler – with a COP of 2.6 it will be using the same amount, roughly, of carbon. Add to this the carbon cost of the embodied energy of the installation and there is clearly no carbon benefit.

If the COP is any lower, especially if it is as low as 1.0, then the ASHP will be using more carbon than the gas boiler it is replacing!

The RHPP is a chance for the Government to obtain real-world measurements on the performance of ASHPs. This is why it is specifically targeted at off-gas-grid households.

But given all of the above, the Government needs to take a long hard look at whether there is real benefit for the overall carbon-intensity of the energy mix of encouraging this marginal technology, or whether it's better putting its money into subsidising more carbon-efficient modes of heating.

Are heat pumps effective? The answer: it depends...

Most heat pumps are not being installed correctly and do not perform as well as expected, finds a survey of 83 sites recently published.

Heat pumps are one of the government's answers to increasing energy efficiency in homes. If the Green Deal, or the Renewable Heat Incentive, go ahead, the advice behind government policy suggests that heat pumps are highly cost-effective for saving carbon per £ of money spent.

But this report confirms what the Low Carbon Kid has said before - they only do so under certain circumstances.

Heat pumps are a new and growing technology: during 2009, their installed base doubled with annual sales of around 14,000 units.

However, there have been very few field trials to determine whether they actually match up to expectations in real-life installations.

Moreover, their effects on reducing carbon emissions is widely misunderstood.

Now, the first study of installations in the UK has been published by the Energy Saving Trust. It provides a mixed picture.

How do they work?

The principle of heat pumps is the same as a fridge, but backwards: if it was operating in a fridge, heat, instead of being pumped out of the back of the fridge, would be pumped from the outside of the fridge, into it.

This would heat the fridge up because low temperature air from large volume would be concentrated into a higher temperature in a smaller volume.

If, instead of a fridge, we have a building or a room, the same principle applies on a larger scale.

Heat pumps can take heat from the ground, air or a nearby body of water if it’s available.

Many heat pumps are reversible, and can be used for cooling – except, of course, it would be better if the home could be cooled without using electricity (solar cooling is real, commercial, and one of the first uses of solar energy in 1876).

How do we judge a heat pump?

Heat pumps are judged by their coefficient of performance (CoP). This is the ratio of the amount of heat or coolth produced divided by the electricity consumption of the pump used to operate it.

So for example a heat pump with a CoP of 3 (or 3:1) will produce three times as much heating or cooling energy as the electrical energy it consumes.

The higher the COP, the better the performance. The COP depends on the difference between the temperature of the source and the final delivered temperature. The greater the difference, the lower the COP.

Therefore, heat pumps are far more effective if used for space heating which is delivered by radiant heating - underfloor heating or skirting board heating - which can be at a much lower temperature - for example 20°C - to achieve the same level of thermal comfort as central heating radiators kept at a much higher temperature. This depends on the overall heating and system design.

As for the temperature of the source, the ground, 10 feet or so under, has a relatively stable temperature in this country and rarely goes below freezing, whereas the air can go below freezing in the times that we need heating the most. This negatively affects the performance of air source heat pumps, reducing their efficiency severely. So in these situations in air source pumps are at a disadvantage.

So how did the heat pumps perform?

The 83 heat pump systems performed very differently. Many systems appeared to be installed incorrectly.

The air source products had a COP that varied between 1.2 and 3.3. The ground source ones were slightly better, varying between 1.3 and 3.6.

Overall system efficiency was approximately the same, but slightly less.

This compares to a European trial where the ground source heat pumps performed significantly better than air source.

The effect on carbon emissions

What the report does not discuss is how effective they are at reducing carbon emissions. This depends entirely on what form of heating for space or water the heat pump is replacing, either theoretically or in practice.

If the heating was previously supplied by electricity, and the electricity was not renewable, then the COP needs to be consistently over 3 to make any difference to carbon emissions.

This is because of the losses - typically over 70% - in efficiency between the burning of fossil fuel in the generating plant and the arrival of the electricity at the heat pump.

If the electricity is renewable, there is clearly a benefit.

They are most effective at reducing carbon emissions and heating bills if they are replacing heating fuels such as electricity, LPG and oil. They are less effective if they are replacing gas. In fact they may have a negative effect on carbon emissions, if the COP is below 3.

Recommendations

The main non-technical factors affecting the performance of the heat pumps are the system design, installation and customer behaviour.

The report concludes "it is essential that installation and system design meet the heat demand of the particular building".

It recommends improved consumer advice for the use of the controls, which many users found confusing. This was especially true of social housing tenants, if they are not actively involved in the choosing, installation and training process.

One problem with installation was that often there was "no single contractor responsible for installation, which might involve a ground works contractor, a plumber, a heat pump installer and an electrician. This meant that there was often no single point of responsibility for the whole installation".

The report concludes that the performance of heat pumps depends very much on installation and commissioning practices. It recommends a thorough review of installation guidelines and proper systematic training for installers.

The Energy Saving Trust is working with trade associations, manufacturers and the governments and the Microgeneration Certification Scheme to identify improvements in installation guidelines and training.

The industry response

"The heat pump industry is addressing these issues through major investment in training and support of the new National Occupational Standards published by Summit Skills earlier this year. Industry is also actively engaged in the successful development of a National Skills Academy," said Kelly Butler, BEAMA's marketing director of the British Electrotechnical and Allied Manufacturers Association, in response to the report.

"This year, an estimated 2,000 installers have been trained in heat pump design and installation. By 2020, under the new qualification framework, 8,000 installers will be trained to help install some one million heat pumps," Butler said.

The majority of field trial sites actually pre-date government's relatively new Microgeneration Certification Scheme (MCS), which is also supported by the heat pump industry.

This scheme certifies product and installer standards and currently has 357 products and 370 installers approved. More than 200 additional heat pump products are currently in the process of approval.

In addition, BEAMA says its Underfloor Heating Manufacturers Association will be seeking to publish guidance on the advantages of effective low temperature heating systems.

Heat pumps are a relatively new technology being rolled out quickly on a mass scale. If they are to have the effect on energy efficiency and carbon emissions that the government hopes, they certainly need to be installed and operated with much greater knowledge and sensitivity to how they work.

Renewable energy grant scheme abruptly halted

The new Government's self-professed green credentials have come under question as a key grant scheme to put renewable heating into buildings has been stopped, to save a mere £3 million.

As of 6am on Monday, May 24th, the Government stopped taking fresh applications for grants for renewable heat systems. These were available under phase 2e of the Low Carbon Buildings Programme (LCBP).

The previous government’s intent was for the Renewable Heat Incentive (RHI) to take over from the LCBP. However there is now a gap of ten months before this goes live on April 1st 2011.

The LCPB's website says that "demand for grants has been unprecedented" and "we had very little unallocated funding remaining". It has therefore "been decided that by closing the programme now, these unallocated funds will contribute towards DECC’s overall savings".

The Solar Trade Association (STA) called it a "a retrogressive step" given "the relatively small budget required to support the LCBP".

DECC's cuts

The Department of Energy and Climate Change (DECC) said it had to make the cut to as its part of the £6bn cuts announced by George Osbourne and the Treasury. DECC is contributing £85m to this total.

About half this figure will come from efficiencies and other savings across our central spending and that of DECC's quangos. The other half comes from cutting or slowing down planned expenditure.

Effect on the industry

The declared "unprecedented demand" indicates a healthy sector and the public's desire to install microgeneration. Many social housing providers had significant plans to install renewable technologies such as heat pumps this year under the scheme.

These and other projects will now most likely be put on hold until the RHI comes in, although its exact form has yet to be confirmed.

Therefore the STA believes the ten month gap will cause a loss of jobs in the industry just at the moment the country wants to build capacity to install hundreds of thousands of renewable heating systems each year.

They called on the Government to find a small extra element in its budget to support the LCBP until the launch of the new incentive.

Howard Johns, Chairman of the STA said “This is very bad news for the solar industry, and a very disappointing move from the new coalition who are aiming to be the greenest Government ever. Once again been undermined for short term gain. At this point we have no idea what the RHI will look like and whether we will get it at all - effectively leaving our sector in limbo, and jobs at risk.”

Scott McLean, marketing director of Ownergy, commented: "The same happened to LCBP grants for renewable electricity installations ahead of the Feed-In Tariffs going live. We don't see it as any indication that the Renewable Heat Incentive is under threat."

The Low Carbon Buildings Programme

The LCBP grant programme has provided approximately 20,000 grants for the capital and installation costs of Microgeneration equipment of which, to date 11,000 have been for thermal technology (33% by value, 58% by number of installations). These have produced lifetime carbon savings of 300,000 tonnes of CO2.

Feed-In-Tariff for renewable electricity, introduced on 1 April 2010, mean that LCBP is no longer required for electrical microgeneration.

Heat pumps - should you believe the hype?

It is not at all clear to the Low Carbon Kid why heat pumps are described as renewable energy technologies. Since they use electricity, they are not. It is especially clear that air source heat pumps, unless powered by renewable electricity, and unless replacing electric heating, should not be used at all.

Read on to find out why... this is an extract from my forthcoming book The Expert Guide To Sustainable Home Refurbishment, to be published by Earthscan next summer.

How heat pumps work

Heat pumps can take heat from the ground, air or a nearby body of water if it’s available. All of them basically work like a fridge backwards.

For example, typically, in an air-source heat pump, air flows over two refrigerant-filled heat exchangers, similar to those in a fridge, one outdoor and one indoor. In the heating mode, liquid refrigerant within the outside coil extracts heat from the outside air, making the refrigerant evaporate into a gas. It then is pumped to the indoor coil, which reverses the process. The refrigerant condenses back into a liquid and returns to begin the cycle again. As the volume of air outside is much greater, the amount of heat in it, when transferred to a smaller volume, results in a higher temperature.

Ground source heat pumps work the same way, but the element containing the coolant is buried in the ground, and so takes the heat from there.

Judging efficiency

Heat pumps are judged by their coefficient of performance (CoP). This is the ratio of the amount of heat produced divided by the electricity consumption of the pump. So for example a heat pump with a CoP of 3 (or 3:1) will produce three times as much heat energy as the electrical energy it consumes. The higher the CoP the better the performance.

You can maximise the CoP by choosing a heating system requiring a lower final water temperature - radiant heating like underfloor or skirting board heating rather than domestic hot water and radiators - and by choosing a heat source with a high average temperature (e.g. the ground rather than air).

The final efficiency will be significantly better for underfloor heating covered by solid screed (tiled etc.) finishes than timber, and/or carpets.

Benefits of heat pumps

Other benefits of heat pumps over conventional boilers include:

• no combustion or explosive gases in the building

• no need for flues or ventilation

• no local pollution (although noise from the outside fan may be a problem if air-source)

• long life expectancy

• low maintenance costs

• the payback period can be as short as 4-5 years and save up to 75% of conventional heating costs.

Ground source heat pumps

These require a network of underground coils or loops to extract heat from the ground. A hole must be dug and the collecting coil buried - usually a closed circuit loop of 20-40mm high-density polyethylene piping filled with a mixture of water and glycol anti-freeze. Holes take two forms: the commonest is a series of horizontal trenches (wet ground is better than dry); or one or more boreholes. The system also includes a heat exchanger, pump and delivery pipes passing under an exterior wall (typically a French window or other door) to the destination.

Care must be taken that the coil makes good contact with the ground. As the depth increases the maximum and minimum soil temperatures begin to lag the surface temperature. At a depth of about 1.5m the lag is about one month. Below 10m the ground temperature remains effectively constant at around the annual average air temperature. Sizing is complex and specialised software is required, available, amongst other places, via the website of The International Ground Source Heat Pump Association (IGSHPA).

Ground-source heat pumps are more expensive but the payback is reduced, financially and carbon-wise, if a hole is being dug anyway, for example for foundations. However they have a long life expectancy (typically 20-25 years and up to 50 years for the ground coil) and are a great idea if the opportunity’s there.

One where the ground is well above freezing (ten degrees) outputting to radiant heating (underfloor or skirting) would be ideal, especially if it is replacing electric heating. It will yield significant carbon savings.

But if it is replacing a modern gas-condensing boiler, which can have over 95% efficiency, the carbon savings are much less.

Air-source heat pumps

Like air-conditioners, they suck in outside air, the units being placed a distance from the dwelling to reduce noise. Despite their reduced efficiency, an advantage of air-source heat pumps over the ground-source variety is their lower installation cost. They are thus more appropriate for renovation projects than ground-source models.

Air-source heat pumps extract heat from the outside air, even in the coldest months. However, the colder it is, the less efficient they become and the more warmth you need.

In mild weather, the COP may be around 4, but at temperatures below around 8°C (17°F) an air-source heat pump can achieve a COP of 2.5 - below the magic 3 level at which carbon savings are realised.

The average COP over seasonal variation is typically 2.5-2.8, but obviously this depends how cold it gets in the winter. As soon as it drops below freezing, the CoP plummets. Of course, it will never reach 1, but it will be much less carbon-efficient than gas or biomass.

Further questions have been raised about the power used by the pump to de-ice itself. Professor David Strong, chief executive of Inbuilt, has observed that “ice build-up on the evaporator of an air-source heat pump is a serious problem, with icing typically occurring whenever outdoor air temperatures fall below about 5°C (this can be as high as 7°C with some systems). In these situations COPs fall to less than one (i.e. worse than direct acting electric heating).”

The de-icing process means that the outdoor heat exchanger becomes the condenser, hot refrigerant being used to melt the ice. But electricity continues to be used by the compressor and pulls heat from inside the building - not you want in cold weather. Some systems use hot gas bypass or direct acting electric elements. Professor Strong has called for an objective assessment of the technology's effectiveness. One is being conducted by the Fraunhofer Institute, and preliminary results show average annual CoP was 2.99. For ground source it was 3.72, significantly better.

Are they noisy? The exterior pump - around 1.2m x 0.7m x 1m tall - generates around 50dB at full fan speed at one metre distance. This is similar to that of an air conditioning unit. The heat exchanger unit, inside - fridge-sized, around 1.8m tall - is about 42dB at one metre distance, similar to a large refrigerator.

Whole house passive stack ventilation with incoming air pre-warmed using a heat pump

Heat pumps can transfer their heat to air or water. If to air, it is directed through vents in the ground floor. The air is drawn through and up the building by pressure differences (heat rises). An advantage of air destination heat pumps is that air into which the heat is passed usually needs a lower temperature than water heating for the same level of comfort, resulting in a higher CoP and increased heat output.

Borderline efficiency

Once the COP descends to 3 or less, if the electricity supplying it is not from a renewable source, and if it is replacing electrical heating, then there is no carbon saving from using the heat pump, since generation and distribution inefficiencies account for two thirds of the energy in the original carbon fuel.

Most of the time air source heat pumps will not achieve a CoP which saves carbon emissions - it will happen only if the air is at or above zero degrees and the target temperature is 35 degrees. A ground source heat pump will perform better.

This is because during the heating season (winter) the outside air temperature is often much lower than the ground temperature (at a depth at which heat is extracted by a ground-source heat pump).

Hot water and heating can be provided 365 days a year; the hot water can be at 55°C; but the CoP will be low, though not as low as 1 - that of a gas or immersion water heater. In other words, it will be more cost-efficient but not as carbon efficient.