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Current RHI dilemma


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6 hours ago, Chriswills said:

As a matter of interest what is the best EPC rating to have which will pay the most RHI payments?

 

It's a bit of a balance, and the paperwork has to stack up. Since 2017, RHI has been capped at a max annual heat requirement of 30,000 kWh. While your RHI will be higher, the closer you get to that figure, if your actual use is that high then you are saddled with paying for that energy requirement year after year.

Low temp flow rate and high SCOP of the ASHP also push up the RHI payment. If your annual heat requirement is too high, you may struggle to have sufficient emitter area to get the flow temp down to the 35°C, which provides the highest RHI payment.

 

Basing the RHI on the annual energy use defined on the EPC has opened up the RHI grant to being "gamed". EPC's can be quite inaccurate, as they can be completed with lots of default values, ie. for air tightness, if the property hasn't had an air tightness test, and for cold bridging, to avoid the assessor having to do the detail calcs for a particular property.

 

In theory, if a property owner was so minded, and knew their property was better than the default air tightness value, and better than the default cold bridging Psi values they could allow the EPC to be completed with the default values to take the higher RHI payment, when their actual usage will be lower.

With the system costs to the owner being not just about the initial investment, but also the day-to-day running costs, I would have thought the best balance would be achieving as low heat loss as possible, to keep the long-term bills down, making sure you have a 35°C flow rate and a high SCOP on the ASHP, and then leave it to the assessor to work out the EPC, without being too helpful...  The installed system output does need to be roughly matched to the EPC heating requirement.

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1 hour ago, J1mbo said:

Cost £14k, RHI £12k, cost £2k.

 

Compared to eg new oil system with tank. Cost maybe £8k, RHI £nil.

 

For those that have access to the capital, RHI has made it a no brainier.

As I said prices are stupid, the system is costing £6k more than an oils system.  Why?

 

You may be getting hands out over a 7 year period, but prices are over inflated.

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1 hour ago, JohnMo said:

As I said prices are stupid, the system is costing £6k more than an oils system.  Why?

 

Pricing is closer than that, but you have to get in to the detail. I priced both up for mine and there was £3K to £4K difference.

 

You can't have a combi-type boiler with ASHP, so you can't save the money on not having a Hot Water Cylinder. To be fair then on ASHP you need to compare pricing with an Oil system boiler install. Then all the cylinders, valves, buffers, expansion tanks etc. are the same for each install, and the only difference is the "boiler", and in Oil and LPG's case, the storage tank for the fuel.

 

Oil and LPG System Boilers when I looked where around £1,500, off the shelf and an branded ASHP was around £5K. But then it was at least £1K + Install for the Oil or LPG storage tank. So the difference is a lot closer.

 

Yes, you can do an Oil combi install a bit cheaper, but it's now not worth it as Oil and LPG boilers are banned from replacement from 2026, at which point you'd then need to install the hot water cylinder anyway.

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2 hours ago, JohnMo said:

As I said prices are stupid, the system is costing £6k more than an oils system.  Why?

 

You may be getting hands out over a 7 year period, but prices are over inflated.

 

The ASHP market is currently tiny compared to oil/gas - and anyway, nice stuff (especially tech) costs money. Octopus have stated that they will be offering ASHP installed (presumably Vaillant based on their marketing videos) from £5,500 in about a years time. As the market expands the prices will tumble, as with any tech.

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7 hours ago, IanR said:

 


With the system costs to the owner being not just about the initial investment, but also the day-to-day running costs, I would have thought the best balance would be achieving as low heat loss as possible, to keep the long-term bills down, making sure you have a 35°C flow rate and a high SCOP on the ASHP, and then leave it to the assessor to work out the EPC, without being too helpful...  The installed system output does need to be roughly matched to the EPC heating requirement.

 

Don't know about that. My EPC says 20,500 kWh/year and the MCS calcs say 13,500.  I get the maximum RHI  based on the 20,000 cap for an ASHP, which gets me £11,300.  I'm not complaining though. 

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1 hour ago, Kevm said:

 

Don't know about that. My EPC says 20,500 kWh/year and the MCS calcs say 13,500.  I get the maximum RHI  based on the 20,000 cap for an ASHP, which gets me £11,300.  I'm not complaining though. 

 

Your example shows exactly what I was highlighting, assuming your actual energy use is closer to the MCS calcs rather than the EPC calcs.

 

Part of the RHI check though is that the installed system is capable of delivering the EPC energy requirement, so the installed system will be oversized for the need.

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7 hours ago, IanR said:

Part of the RHI check though is that the installed system is capable of delivering the EPC energy requirement, so the installed system will be oversized for the need.

No. The RHI payment is based on the EPC but the system is sized based on the MCS calculations.

 

I believe that it is quite legitimate to improve the building (eg new windows) between the EPC and MCS.

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1 hour ago, sam said:

No. The RHI payment is based on the EPC but the system is sized based on the MCS calculations.

 

I believe that it is quite legitimate to improve the building (eg new windows) between the EPC and MCS.

Is that then fraudulent, as you claiming payments on something fictional.

 

Example.  Have EPC done, renovate to passivhaus standards, claim payment based on a leaky seive of a house, would be the ultimate be extension of what you are saying is legitimate.  Cannot see how that is correct.

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Subsidies are designed to incentivise behaviour rather than to be inherently fair or logical.

 

In your example the RHI has encouraged the installation of a heat pump which may not have been installed otherwise. The other option may have been to install an oil boiler and not improve the insulation at all. I believe it to be legitimate under the OFGEM rules and not fraudulent.

 

The requirement to install basic insulation (eg cavity wall insulation) before hand and to cap the total KWHs go some way to prevent the most extreme 'playing the system'.

 

A related but different example: it would be ridiculous if you were obliged to pay back (or stop receiving the RHI) if you were to improve insulation after the RHI claim (i.e. during the 7 years) as this would disincentives later insulation.

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The RHI application is extremely vague on this point, during sign up it has a warning that if you make changes to the house that may impact the EPC you may be required to get a new one done, but no indication as to what could actually trigger that or when.

And as Ian said above, even if it were triggered I could get a fresh EPC done today but absolutely nothing (except pride) obliges me to provide the assessor with our actual insulation or airtightness numbers thus the up to date EPC would still payout higher RHI than if a fully informed EPC were done. 

 

The only reason I persevered through the ridiculous green home Grant application to limit impact of these RHI vagaries. 

 

At the end of the day anyone thinking of gaming the system by getting a crap EPC for RHI then renovating to passivhaus standard will end up paying of order 10x in VAT on their eco measures than they score back through the delta in RHI, so with both the government coffers and the environment  benefiting from this devious intent, it doesn't smell like the moral crime of the century.

 

 

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8 hours ago, sam said:

No. The RHI payment is based on the EPC but the system is sized based on the MCS calculations.

 

I believe that it is quite legitimate to improve the building (eg new windows) between the EPC and MCS.

 

Yes, the Heat Pump is sized to the MCS calcs by the Installers, but Ofgem check that the system installed is capable of delivering the heat requirement of the grant being paid out. If the system is undersized for the EPC energy requirement, the application is put on hold while more questions are asked and evidence requested. The grant is then rejected if the compliance team at Ofgem are not satisfied. I've witnessed this exact scenario.

 

One of the RHI rules is that the EPC  "accurately reflect information about your home at the time you apply", as well as being under two years old and with no loft of cavity wall insulation recommendations, so it would not be legitimate to provide an EPC from before works were done to improve a home, if the application was made after.

 

7 hours ago, JohnMo said:

Example.  Have EPC done, renovate to passivhaus standards, claim payment based on a leaky seive of a house, would be the ultimate be extension of what you are saying is legitimate.  Cannot see how that is correct.

 

I agree, this would be against the rules. My previous point is that there is no requirement to have an air tightness test, so an EPC may legitimately overstate the energy requirement if the actual air tightness is below the defaults used in the EPC calcs. For a new build I believe the default is 5m³/h.m² and 10m³/h.m²  for a conversion, not sure for an older house.

Edited by IanR
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1 hour ago, IanR said:

One of the RHI rules is that the EPC  "accurately reflect information about your home at the time you apply", as well as being under two years old and with no loft of cavity wall insulation recommendations, so it would not be legitimate to provide an EPC from before works were done to improve a home, if the application was made after.

 

I stand corrected - this is in the FAQs for RHI.

 

I cannot find the actual legal terms and am curious how this is detailed. I know I'm being pedantic, but to comply with this an applicant would appear to need an EPC produced after the heat pump was installed!

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28 minutes ago, sam said:

I cannot find the actual legal terms and am curious how this is detailed. I know I'm being pedantic, but to comply with this an applicant would appear to need an EPC produced after the heat pump was installed!

 

While an ASHP v. fossil fuel boiler improves the EPC score due to the better efficiency of the heat source, I'd assume it doesn't effect the annual heat requirement for the house, so I would think it is OK to use an EPC from prior the ASHP installation, as long as no work has been done after the EPC that effects the heat loss calcs.

 

...but I am making a few assumptions there, so if this is specific to an application you will soon be making, you are best getting Ofgem's view.

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3 hours ago, IanR said:

 

While an ASHP v. fossil fuel boiler improves the EPC score due to the better efficiency of the heat source,

 

I don't think so.  An ASHP is viewed as electrical heating and scores badly on the EPC.  EPCs fail to recognise the energy efficiency of a heat pump, AFAIK.

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29 minutes ago, ReedRichards said:

 

I don't think so.  An ASHP is viewed as electrical heating and scores badly on the EPC.  EPCs fail to recognise the energy efficiency of a heat pump, AFAIK.

 

As I declared, I was making assumptions, and had assumed that the "Efficiency of main space heating system" value #206 in Work Sheet 9a of the SAP Calcs, where for an ASHP should be several hundred (%) gets rolled in to the algorithm to push up the EPC score, but perhaps it's only used for estimating heating costs...

 

Either way, whether it is an ASHP of FF Boiler the annual heat demand for the property should be unaffected.

 

 

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10 hours ago, Chriswills said:

No it’s fine on time as long as you pay the deposit and book the job. Can be done. 

 

Not sure what you mean there. wrt RHI closing, System needs to be installed and commissioned prior to midnight 31.03.2022, and paperwork submitted.

 

If you pay a deposit to an installer, make sure it's returnable if they fail to commission and provide you with all required paperwork before 31.03.2022. 

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2 hours ago, IanR said:

 

Not sure what you mean there. wrt RHI closing, System needs to be installed and commissioned prior to midnight 31.03.2022, and paperwork submitted.

 

If you pay a deposit to an installer, make sure it's returnable if they fail to commission and provide you with all required paperwork before 31.03.2022. 

Yes I thought so too, as I had to give details of meter serial nos and readings on application.

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