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Solar Trade Association Chapter House, 22 Chapter Street, London, SW1P 4NP
t: +44(0)203 637 2945 e: [email protected] w: www.solar-trade.org.uk
@thesolartrade
Future Support for Low Carbon Heat
Solar Trade Association Consultation Response 07 July 2020
This response is representing the views of an organisation.
Organisation Name: Solar Trade Association
Lead Authors: Rachel Hayes
Policy Officer
Cameron Witten
Policy Manager
Contact Telephone: +44(0) 203 637 2945
Contact Address: Greencoat House, Francis Street, London, SW1P 1DH
Would you like this response to remain confidential? No
Does your interest in this consultation relate to a particular geographical area?
Yes, Wales, Scotland and England. This response maybe shared with the Scottish and Welsh devolved authorities.
About us
Since 1978, the Solar Trade Association (STA) has worked to promote the benefits of solar energy
and to make its adoption easy and profitable for domestic and commercial users.
A not-for-profit association, we are funded entirely by our membership, which includes installers,
manufacturers, distributors, large scale developers, investors and law firms.
Our mission is to empower the UK solar transformation. We are paving the way for solar to deliver
the maximum possible share of UK energy by 2030 by enabling a bigger and better solar industry.
We represent both solar heat and power, and have a proven track record of winning breakthroughs
for solar PV and solar thermal.
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STA Response to Consultation Questions 22. Do you agree with targeting support at domestic and non-domestic installations with a
capacity up to and including 45kW? Yes/No. Please provide evidence to support your response.
Yes and No.
We agree that low-carbon heat should be incentivised within both domestic and non-domestic
sectors; action in both residential and Commercial and Industrial sectors is needed to make progress
towards decarbonisation of heat across the UK economy; and each sector is important in terms of
creating market opportunities for the UK low-carbon heat supply chain.
It is our view, however, that the structure of support that would be most effective will be different
for each of the domestic and non-domestic sectors.
The STA therefore recommends that the Clean Heat Grant target the domestic market, for which a
maximum peak heating capacity of 45 kWp is more than sufficient, and that the scheme uses the
Microgeneration Certification Scheme (MCS) framework for compliance (product and installation).
We further strongly recommend that a separate scheme is set up for incentivising investment in
low-carbon heat for Commercial and Industrial sectors, where the scale of heat demand will often
be such that a 45 kWp limit is not appropriate.
23. Do you agree that support for buildings technologies should change from a tariff to a grant?
Yes/No. Please provide evidence to support your response.
Yes, we agree that support for residential-scale (domestic and under 45 kWp) low-carbon heat
technologies should change from a tariff to a grant.
We provide evidence in our response to question 40 that grant based schemes have been successful
in both Ireland and Austria to support the greater deployment of solar thermal and heat pumps.
We would however reiterate that the Government should consider a separate scheme to support
the decarbonisation of heat in the Commercial and Industrial (non-domestic) sectors. A Clean Heat
Grant designed for the domestic sector is unlikely to be effective for the Commercial and Industrial
sector.
24. Do you agree with our proposal to offer a technology-neutral grant level? Yes/No. Please
provide evidence to support your response.
No, we argue clearly in our response to question 40 that solar thermal (including PVT) should be
included in the Clean Heat Grant. The grant given to solar thermal should not be the same as that
given to a heat pump given the difference in capital cost. We provide an appropriate solar thermal
grant level in our response to question 40.
The STA would also encourage BEIS to consider expanding the scope of the Clean Heat Grant scheme
to include incentives for the installation of “renewable heat ready” thermal energy storage.
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Compact heat storage is being trialled as part of the BEIS ‘Electrification of Heat Demonstration
Project’ and grants would be an effective mechanism to stimulate demand in this sector.
25. Do you agree that £4,000 is an appropriate grant amount to meet the aims of the scheme?
Yes/No. Please provide evidence to support your response.
No, as with our response to question 24, we argue clearly in our response to question 40 that solar
thermal (including PVT) should be included in the Clean Heat Grant. The grant given to solar thermal
should not be the same as that given to a heat pump given the difference in capital cost. We provide
an appropriate solar thermal grant level in our response to question 40.
26. Do you agree with the recommendation for a flat-rate grant? Yes/No. Please provide evidence
to support your response.
Yes, as with our response to question 25, we argue clearly in our response to question 40 that solar
thermal (including PVT) should be included in the Clean Heat Grant. We do however think the grant
should be flat rate, assuming the scheme focuses on the domestic sector.
As with our response to 22, we would however again reiterate that the Government should consider
a separate support scheme to incentivise the decarbonisation of heat in the non-domestic
Commercial and Industrial sectors.
28. Please provide any relevant views to help inform development of the delivery mechanism.
We support the delivery of the Clean Heat Grant via the Microgeneration Certification Scheme
(MCS) framework for compliance (product and installation).
We also suggest that BEIS considers expanding the scope of the Clean Heat Grant scheme to include
incentives for the installation of ‘renewable heat ready’ thermal energy storage.
37. Do you agree that quarterly grant windows would prevent overspend and manage demand to
ensure an even spread of deployment? Yes/No. Please provide evidence to support your
response.
No, we do not see any reason why, with a digital application system, you could not have monthly
grant windows. This would help installers manage the expectations of homeowners.
38. Do you agree with not supporting process heating under the Clean Heat Grant? Yes/No. Please
provide evidence to support your response.
Yes, in our view, a Clean Heat Grant designed to support domestic homeowners to renovate their
properties would not be appropriate as a mechanism to support the decarbonisation of process
heat.
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40. Do you agree with not supporting solar thermal systems under the Clean Heat Grant? Yes/No.
Please provide evidence to support your response.
No, the STA strongly disagrees with the proposal of not supporting solar thermal systems under the
Clean Heat Grant.
For this question, we address each of the arguments made in the supporting text, providing
evidence for our position and then suggest how the Clean Heat Grant could be designed for solar
thermal (including PVT).
40.1 The Clean Heat Grant is aimed at providing targeted support to technologies with established
strategic importance, ahead of the future phase-out of high carbon fossil fuel heating in existing
buildings off the gas grid. Our view is that heat pumps and, in limited circumstances, biomass, are
likely to be the key technologies to deliver this.
There may be some truth in the argument that heat pumps are likely to be a key technology in future
phase-out of high carbon fossil fuel heating in existing buildings in the UK off the gas grid, however,
the STA considers that this takes a very narrow view of the low-carbon heat supply chain.
A review of heat pump manufacturer, distributor, and installer websites shows that solar thermal
collectors and cylinders are sold alongside their heat pump ranges. For example, Grant Engineering
(Sahara Collectors), Vaillant (auroTHERM), Mitsubishi Electric (Ecodan FTC5 monobloc pre-plumbed
solar cylinder), Viessmann (Vitosol), Bosch (Lifestyle Solar) and Dimplex (Direct Solar Thermal
Cylinder). This is because there are strong synergies between heat pumps and solar thermal
systems.
One of the main reasons that solar thermal is sold alongside heat pumps, particularly in existing
buildings off the gas grid, is because it can reduce the cost of heat and improve overall system
efficiency for a relatively modest capital cost increase. Thus, by not supporting solar thermal in the
Clean Heat Grant, the scheme will disincentivise the installation of systems that actually reduce the
cost of heat to the consumer. The scheme may then not only damage the prospects for deployment
of solar thermal, but could also foster a negative impression of heat pumps with consumers.
We would also draw attention to the academic study [1], on which the Heat Pump association report
‘Delivering Net Zero: A Road Map for the Role of Heat Pumps’ [2] is based, (from which this
consultation derives part of its’ evidence), and which states that solar thermal is strategically
important. The study clearly calls for the deployment of “solar thermal, heat pumps and modern
biomass” in the deep decarbonisation of residential heating for limiting global warming to 1.5 °C
and contrary to the view set out in this consultation:
“Subsidy schemes are simulated in scenarios f and g. The projected decrease in annual
total CO2 emissions by 2050 is 49% for a 25% subsidy and 62% for a 50% subsidy. Results
suggest a clear shift of household choices towards more capital-intensive and efficient
technologies, in comparison to the carbon tax: solar thermal and ground-source heat
pumps show the largest increases in uptake (up to + 100 and + 200% relative to scenario
c, respectively)” [1].
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As evidenced by the study referred to above and by the commercial practice of the heat pump
supply chain promoting solar thermal alongside heat pumps, solar thermal should be considered a
strategically important element of the decarbonisation of residential heating.
A growing UK market for solar thermal would also provide a platform from which UK manufacturers
and innovators could compete in solar thermal markets globally; this adds to the strategic case for
incorporating solar thermal within the Clean Heat Grant.
40.2 Whilst it is possible that solar thermal will play a role in the long-term decarbonisation of
heating in the UK, the technology is not a stand-alone solution for phasing out fossil fuels within
buildings.
The STA would like to challenge the prevailing discourse that a technology should be ‘a stand-alone
solution’ to be considered strategically important.
In many circumstances, and as illustrated within our comments in relation to 40.1, the most
effective approach to generation of clean heat is by using two technologies, such as heat pumps and
solar thermal, in combination. In the appendix we have included an example calculation of a solar
thermal system supporting a house heated with an air-water heat pump. It shows that in Edinburgh,
a solar system can provide more that 50 % of the space heating and hot water, reducing the cost of
energy significantly to the homeowner.
The STA therefore contends that whether solar thermal (or any other renewable heat technology)
is or is not stand-alone should not determine whether the technology should be seen to be
strategically important.
40.3 However, despite tariffs for solar thermal under both the Domestic and Non-Domestic RHI
being high relative to other technologies, deployment has remained low.
We urge the Government not to fall for the fallacy that deployment is independent of policy. Recent
and current deployment levels must be viewed considering the context of government policy and
support programmes over the last 12 years.
Figure 1 shows the deployment of solar thermal in the UK between 2008 and 2019. Under previous
Government grant-based support programmes, solar thermal achieved a significant level of
deployment. Prior to 2008, solar thermal deployment was driven by the ‘Clear Skies’ (2003 to 2006)
grant scheme and this was followed by the ‘Low Carbon Building Programme’ (2006 to 2011), which
was also a grant-based scheme. As it can be clearly seen, in these years, UK solar thermal
deployment was high, with almost 90,000 m2 deployed in in 2010.
Then came the ‘solar shock’. In April 2010, the Feed-in-Tariff (FIT) scheme for solar photovoltaics
came into effect, which was initial set at 48.29 p/kWh [3]; this very generous incentive distorted
the solar energy market in the UK setting the solar thermal market on a continued decline. In the 3
years between the introduction of the FIT and the introduction of the RHI in 2014, most UK solar
thermal companies (including UK manufacturers and installers) went out of business and those that
survived mainly concentrated on selling solar photovoltaic systems.
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Figure 1 – UK solar thermal deployment sales data 2008 to 2019
By the time the RHI was introduced, the solar thermal supply chain had contracted significantly and
there were therefore less companies in place to take the solar thermal RHI proposition to
consumers.
It is also the case that despite relatively high tariffs, the administrative burden of the RHI for solar
thermal, which is generally characterised by lower capacity per installation than heat pumps or
biomass boilers, often did not make economic sense. Today, many solar thermal sales do not claim
RHI, simply because the additional capital cost that is incurred by the RHI application can far
outweigh the benefit from the RHI payments.
To support the case that the deployment is not independent of policy, we present the case of Ireland
and Austria. Ireland has the Home Energy Grants scheme [4] and Austria has the grant based Climate
and Energy fund [5]. Figure 2 shows the deployment of heat pumps and Figure 3 shows the
deployment of solar thermal, both normalised per household and per inhabitant respectively.
As the evidence in the two figures shows, from an international perspective, the deployment of both
heat pumps and solar thermal objectively has been extremely low in the UK. It should be also noted
that air source heat pump deployment has not significantly increased over the course of the
Domestic RHI, with 8,498 installations in 2014 and 11,990 installations in 2019.
Both Ireland and Austria have grant based support schemes and in these two countries, deployment
of solar thermal and heat pumps is significantly higher than in the UK. This supports the case that
grant-based schemes can be effective for both technologies and that solar thermal is of sufficient
strategic importance to include within grant schemes.
37,419
65,505
88,379
76,481
51,944
35,944 30,460
20,241
11,609 9,938 7,038 5,482
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Apert
ure
Are
a (
m2)
Annual Solar Thermal Sales 2008-2019
Evacuated tube collector
Flat-plate collector
Source: STA / HHIC / ICOM
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Figure 2 – Heat pumps (all types) units sold per 1000 households in 2018 - by country [6]
Solar thermal deployment under the RHI was also restricted to domestic hot water installations
(unlike for heat pumps or biomass), which significantly limited the market (due to the use of SAP
2012). Figure 4 shows the cost of solar thermal systems based on their application, with domestic
hot water heating on the left and large-scale solar thermal on the right. The figure clearly
demonstrates that by limiting the use of solar thermal for domestic hot water, the RHI was limiting
it to the highest cost use case.
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Figure 3 – Solar thermal capacity (kW) installed per 1000 inhabitants – by country [7]
Figure 4 – Specific investment costs (left y-axis) and levelized costs of heat (right y-axis) for different solar thermal applications in Denmark (Orange: small-scale domestic systems, green: large-scale commercial applications) [8]
Thus, the evidence from solar thermal deployment prior to the RHI where grant-based support
schemes were used in the UK and the two international case studies where grant-based support
schemes are currently available, strongly suggests that a grant based support scheme in the UK
would result in an increase in deployment of solar thermal.
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Therefore, whist the STA agrees with BEIS that the deployment of solar thermal is currently too low
given the scale of the challenge of heat decarbonisation in the UK, we disagree that the reason for
the low deployment is in anyway related to the suitability of solar thermal for decarbonisation of
heat in the UK. The lower deployment is a result of the policy environment.
40.4 We are also not aware of any evidence of cost-reduction.
Figure 5 shows the experience rates for solar thermal, solar photovoltaics, air source heat pumps,
ground source heat pumps and biomass. Experience rate is the change in capital cost to the
consumer with increased deployment [9]. The capital cost and deployment data is from MCS
Installations Database (MID), which was a requirement of the DRHI.
The evidence clearly shows that in the UK, over the last 10 years, the experience rate of solar
thermal as been 11 %, thus demonstrating there is a strong relationship between increased
deployment and cost-reduction. This rate is in agreement with the academic study in which the
Clean Heat Grant is based, which assumes that solar thermal has a learning rate of 10 % [1]. The
paper also assumes a 30 % learning rate for heat pumps, which the evidence does not support. The
plot also clearly shows that if the deployment rate that was seen early in the decade was
maintained, prices today could have been around £1,000 per kW. This illustrates that although solar
thermal still requires a subsidy to drive deployment today, it is a clear (evidence-based) path to
being subsidy free.
Figure 5 – UK single factor experience curves plot for low-carbon heat and power (microgeneration) using MCS
Installations Database (MID) 2010-2019 data
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The evidence presented in Figure 5 clearly demonstrates that heat pumps (air source and ground)
and biomass have not shown any decrease in cost to the consumer in the last 10 years. Solar
thermal’s record of cost-reduction with increased deployment supports the case for its inclusion in
the Clean Heat Grant.
This evidence also raises an important point that BEIS must consider in the development of the Heat
and Buildings Strategy. The evidence shows that heat pumps are not getting any cheaper, and if this
trend continues will be as unaffordable to consumers in 2025 as they are today. The evidence
suggests that greater deployment may not make heat pumps cheaper.
40.5 Given current cost data and recent deployment trends, we do not have any strong evidence to
suggest that supporting solar thermal water heating through this scheme would prove to be an
effective measure for preparing supply chains for the future phase-out of high carbon fossil fuel
heating.
In summary, we have, in the previous sub-sections to this response, provided the following
evidence:
• There is strong evidence that solar thermal has demonstrated cost reductions over the last
10 years.
• The recent and current low deployment of solar thermal in the UK is simply a consequence
of UK Government policy design; when there were grant-based support schemes in the UK,
solar thermal deployment was significantly higher.
• The limitation imposed by SAP 2012 to solar thermal only providing heat for domestic hot
water heating, significantly constrained the market.
• Countries which have grant-based support schemes for low-carbon heat support both heat
pumps and solar thermal and have significantly higher deployment of both technologies than
the UK.
• The heat pump and solar thermal low-carbon supply chain is highly interdependent, and the
technologies are complimentary, especially in off-gas dwellings.
• A focus on “stand-alone solutions” is misguided.
• The key research paper on which the Clean Heat Grant scheme design is based considers
solar thermal to be strategically important.
We have therefore provided clear and robust evidence to support the case that solar thermal
(including PVT) should be included in the Clean Heat Grant and that supporting solar thermal would
be an effective measure for preparing supply chains for the future phase-out of high carbon fossil
fuel heating.
Finally, we would also highlight that the Government claims to maintain a “technology neutral
approach”, yet solar thermal, as a credible renewable heat technology, has been excluded from the
Clean Heat Grant proposals. Both the Ireland Home Energy Grant and the Austrian Climate and
Energy Fund include solar thermal as an option, and we urge the UK Government to similarly include
solar thermal as an option.
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Level of Grant for Solar Thermal
Given the strong case for including solar thermal in the Clean Heat Grant, we have considered what
subsidy should be given to domestic solar thermal (including PVT) installations to stimulate demand:
• Using the assumptions presented in the consultation, if an average off grid ASHP installation
costs £10,300 and a suitable grant level is deemed to be £4,000, this results in Government
subsidy of approximately 40 %.
• The average cost of domestic solar thermal system in 2019 was approximately £3,745, thus
the equivalent 40 % technology neutral subsidy would be £1,500.
• Ireland’s Home Energy Grant provides homeowners with £1,080 (€1,200) [4] and Austria’s
Climate and Energy Fund £630 (€700) [5] per install.
• The simulated subsidies in the referenced academic paper [1] were 25 % and 50 %, which
would suggest a solar thermal grant between £936 and £1,872.
Given the evidence, the Clean Heat Grant level for
domestic solar thermal and PVT installations
should in our view be approximately £1,000, which
would be about a 25 % subsidy.
41. Do you agree with not supporting hybrid systems under the Clean Heat Grant? Yes/No. Please
provide evidence to support your response.
Yes.
If we, for the purpose of this consultation are defining hybrid systems as “a combination of a heat
pump and fossil fuel boiler”, then yes, we support the position of excluding these systems from the
Clean Heat Grant.
As we state in our response in relation to 40.2, however, the most effective solution for clean heat
generation often involves a combination of renewable heat technologies.
Parc Hadau in Wales [10], for example, combines solar and communal ground source heat pumps
and Energiesprong UK [11] in its Nottingham development, which has recently won BEIS Whole
House Retrofit grant support, used a hybrid of different renewable energy technologies.
Based on the available evidence, the STA firmly believes that if homeowners were given the option
of a grant for solar thermal alongside heat pumps or biomass boilers, that this would be a popular
option.
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References
[1] F. Knobloch, H. Pollitt, U. Chewpreecha, V. Daioglou, and J.-F. Mercure, ‘Simulating the deep decarbonisation of residential heating for limiting global warming to 1.5 °C’, Energy Efficiency, vol. 12, no. 2, pp. 521–550, Feb. 2019, doi: 10.1007/s12053-018-9710-0.
[2] Heat Pump Association, ‘Delivering Net Zero: A Road Map for the Role of Heat Pumps’, 2019. [Online]. Available: https://www.heatpumps.org.uk/wp-content/uploads/2019/11/A-Roadmap-for-the-Role-of-Heat-Pumps.pdf.
[3] Ofgem, ‘Feed-In Tariff (FIT) rates’, Ofgem, Jul. 28, 2016. https://www.ofgem.gov.uk/environmental-programmes/fit/fit-tariff-rates (accessed Jun. 20, 2020).
[4] seai, ‘Home Energy Grants’, Sustainable Energy Authority Of Ireland | SEAI, 2020. https://www.seai.ie/grants/home-energy-grants/ (accessed Jul. 04, 2020).
[5] ‘Startseite - Klima- und Energiefonds’, 2020. https://www.klimafonds.gv.at/ (accessed Jul. 04, 2020).
[6] EHPA, ‘EHPA Stats’, 2020. http://www.stats.ehpa.org/hp_sales/story_sales/ (accessed Jul. 04, 2020).
[7] W. Weiss and M. Spork-Dur, ‘Solar Heat Worldwide: 2019 Edition’, IEA Solar Heating and Cooling (SHC) Programme, 2019. Accessed: Jun. 22, 2019. [Online]. Available: https://www.iea-shc.org/Data/Sites/1/publications/Solar-Heat-Worldwide-2019.pdf.
[8] W. Weiss, M. Spork-Dur, and F. Mauthner, ‘Solar Heat Worldwide: 2017 Edition’, IEA Solar Heating and Cooling (SHC) Programme, 2017. Accessed: Jun. 22, 2019. [Online]. Available: https://www.iea-shc.org/Data/Sites/1/publications/Solar-Heat-Worldwide-2017.pdf.
[9] M. Junginger and A. Louwen, Eds., Technological learning in the transition to a low-carbon energy system: conceptual issues, empirical findings, and use in energy modeling, 1st ed. San Diego: Academic press is an imprint of Elsevier, 2019.
[10] Sero Homes, ‘Parc Hadau’, 2020. https://www.parc-hadau.wales/ (accessed Jul. 04, 2020).
[11] Energiesprong UK, ‘Desirable, warm, affordable homes for life.’, 2020. https://www.energiesprong.uk/ (accessed Jul. 04, 2020).
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Appendix
Professional Report
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Vela Solaris AG, their distribution partners or SPF do not accept any liability for the correctness of the specifications and the results.
Project Solar energy house with air-water heat pump
Location of the system
United Kingdom
Edinburgh
Longitude: -3.22°
Latitude: 55.95°
Elevation: 0 m
This report has been created by:
AES Ltd
AES Building
Lea Road IV36 1AU
01309676911 / [email protected]
System overview (annual values)
Total fuel and/or electrical energy consumption of the system [Etot]
2,270.9 kWh
Total energy consumption [Quse] 10,300.2 kWh
System performance (Quse / Etot) 4.54
Comfort demand Energy demand covered
Professional Report
2 / 8 V6.1.6.18113 / 28.11.2019 / 15:46:06
Vela Solaris AG, their distribution partners or SPF do not accept any liability for the correctness of the specifications and the results.
Overview solar thermal energy (annual values)
Collector area 17.6 m²
Solar fraction total 53.8%
Solar fraction hot water [SFnHw] 62.1 %
Solar fraction building [SFnBd] 48.1 %
Total annual field yield 6,617.4 kWh
Collector field yield relating to gross area 376 kWh/m²/Year
Collector field yield relating to aperture area 390.2 kWh/m²/Year
Max. energy savings 2,454.2 kWh
Max. reduction in CO2 emissions 1,316.4 kg
Overview heat pump (annual values)
Seasonal performance factor for air-to-water heat pump
2.7
Total electrical energy consumption when heating [Eaux]
2,105.8 kWh
Total energy savings 3,572.1 kWh
Total reduction in CO2 emissions 1,916.1 kg
Solar fraction: fraction of solar energy to system [SFn]
Horizon line
Meteorological data-Overview
Average outdoor temperature 9.3 °C
Global irradiation, annual sum 902.2 kWh/m²
Diffuse irradiation, annual sum 496.1 kWh/m²
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