Dimplex Renewables has welcomed last week's domestic Renewable Heat Incentive (RHI) announcement from DECC (12 July).
Business development director at Dimplex Renewables and chairman of the BEAMA Domestic Heat Pump Association, Chris Davis, said: 'Rates have been set at an encouraging level and it is also pleasing to see changes to the tariff levels and value cap for ground source heat pumps and solar thermal, both of which were things that the industry commented on in last year's consultation.

'Our initial modelling shows that for typical ground source and air source heat pumps systems the combination of fuel saving and RHI payments should result in a payback for customers of around five years. This makes it a very attractive proposition for consumers who inevitably look for the financial benefit and installers should be aware of this shorter payback period.'

Mr Davis continued: 'In addition to the tariffs, one of the most important aspects of the new scheme is that DECC is rewarding higher efficiency with higher RHI payments. RHI payment for heat pumps will be based only on renewable heat produced, which means higher efficiency heat pump systems will benefit from both a larger RHI payment and better savings on running costs.

'Together with additional funding for metering and monitoring, this will encourage end users and installers to focus on higher quality, higher efficiency systems - good for the consumer and good for our overall renewable energy targets.'

Mr Davis said that, for installers, the RHI will begin in Spring 2014 but all installations from July 2009 will be eligible, subject to meeting the necessary criteria. This means that anyone installing now can receive RHPP funding to help with upfront costs and still be eligible for RHI. 'As the upfront cost is the biggest barrier to installations, this added incentive will be a huge boost for consumers. For installers, now is the time to act.'

'RHI payment for heat pumps will be based on system efficiency so if you specify higher efficiency heat pump systems, your customers can benefit from both a bigger RHI payment and better savings on running costs.'

For social landlords, Mr Davis said: 'Crucially, the RHI is open to both private householders and social landlords. This means that for the first time, social housing providers can receive funding for renewable heating technologies and enable tenants to cut their fuel bills.

'In particular it creates new opportunities for off-gas grid social landlords who would previously been put off by the upfront cost and most likely restricted to oil boiler technology. Now they can install renewable solutions at the capital investment of non-renewables, using the RHI over seven years to help deliver fuel cost savings for tenants,' Mr Davis concluded.