Rural homes 'could lose out' in renewables incentive schemes
Rural households will not benefit from Government plans to offer incentives to install renewable energy heating systems, a new report commissioned by the oil industry body has found.
The independent research by the Oil Firing Technical Association (OFTEC), has questioned the suitability of the technology in areas where the vast majority of people do not have access to mains gas and rely on heating oil.
The study, from the Clean Energy Consultancy, says installation costs may be high and predicts that the expected carbon and fuel cost savings will not be produced.
It casts doubt over the Renewable Heat Incentive (RHI) – a scheme set to be rolled out to individuals next year with the promise of cheaper bills from renewable technologies such as biomass, heat pumps and solar thermal equipment.
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The South West-based industry body for the renewable sector, Regen SW, countered that the oil industry was simply "defending its own market".
OFTEC director general Jeremy Hawksley said: "OFTEC supports the UK government's aspiration to improve home energy efficiency and reduce carbon emissions.
"However, the research we commissioned shows the technologies that are likely to be incentivised through the planned domestic RHI will not deliver the promised carbon savings in a real life situation, and could end up increasing fuel bills rather than saving householders money."
The report explored the different options available for a consumer if they were to replace an existing oil boiler with a biomass version or a heat pump. It identified the physical space required for a biomass boiler as a big disadvantage.
Planning permission and installation costs of £16,000 were also a major hurdle. This, the report said, compares to the £3,000 cost to replace an existing oil boiler with a high-efficiency condensing one, which would instantly save around 25% on fuel bills, and attract £310 in "cash-back" under the Green Deal scheme.
Air and ground source heat pumps, at a cost of between £10,000 and £17,000, plus extra for larger radiators or underfloor heating, were also cited.
OFTEC has instead proposed bio-liquid – an environmentally friendly altern-ative to oil – which could be used with modified boilers.
Merlin Hyman, chief executive of Regen SW, said: "Renewable energy provides many rural households the opportunity to generate their own energy from local natural resources rather than rely on expensive and highly polluting oil.
"It won't surprise anyone to see the oil industry defending its market, but I have no doubt we will see many more people who live in the country switching to renewables."