Policy Exchange supports end to solar thermal support and EU targets

The conservative think tank Policy Exchange has thrown its weight behind the government’s proposals to axe solar thermal from the Renewable Heat Incentive, claiming that lower cost non-renewable technologies should be allowed onto the scheme.

The policy group’s latest report ‘Too Hot to Handle?’ scrutinises the UK’s progress in decarbonising the heat sector and claims the RHI should be expanded into a Low Carbon Heat Incentive. This would remove the scheme’s weighting towards renewable technologies such as solar thermal and biomass in favour of support for “lowest cost solutions”.

In response to the government’s planned reforms to the RHI, revealed in a consultation back in March, the report agrees that financial support should be removed from solar thermal “on value for money grounds”.

It argues that the technology is only able to provide a part of the heat used in a building rather than being the sole form of heating. It claims solar water heating can only deliver around half of the annual hot water demand of a home, adding that the maturity of the technology leaves little room for further cost reductions.

The Solar Trade Association (STA) has come out against the report, claiming the UK’s solar thermal market is highly underdeveloped compared to other countries and needs stimulus to drive future cost reductions.

It adds that solar thermal has a role to play in the UK’s heat networks, providing low carbon heat to large groups of households through district heating systems.

The STA have also disagreed with the report’s proposal to abandon the country’s EU-set renewable energy targets. A lot of scrutiny has been placed on these targets, with both the National Grid and most recently the energy and climate change select committee concluding that the UK would miss its 2020 renewable energy targets.

‘Too Hot to Handle?’ suggests removing the goals, which include a 12% renewable heat sub-target, would allow the government to pursue the lowest cost solutions to decarbonise heat, and be more open-minded to the range of options available.

This would allow more cost effective measures such as energy efficiency to be deployed cheaper than renewables, allowing the market to determine outcomes.

In a statement released on 9 September, Leonie Greene, head of external affairs at the STA, said: “We disagree with any notion of dropping the UK’s renewables energy targets. The targets are there for good reason; the UK performs particularly badly on renewable heat as the Energy and Climate Change Committee highlighted only today.

“Just as Government has done with the renewable power sector, focussed investment is needed to pump-prime technologies that will enable everyone to use clean heat in their homes affordably in future. This is a vital investment for the long term.”

The report also suggests closer integration of heat, energy efficiency, and fuel poverty policy; increase research and development of energy efficiency technologies; and adjustments to taxes and levies on electricity, gas and other heating fuels to better reflect their carbon content.

It also calls for a clear set of objectives and parameters for the decarbonisation of heat in the Carbon Plan, which is due by the end of the year.