Changes to the non-domestic Renewable Heat Incentive (RHI) have now taken effect after parliamentary approval.

Following a long period of consultation with the industry, DECC has confirmed that air to water heat pumps will finally be included in the scheme, which provides guaranteed payments over a 20 year period for eligible installations for renewable heat generated by organisations in the commercial sector.

Under the changes, air to water heat pumps will now be included with tariff of 2.5p/kWh and the tariffs for renewable heat generated by ground source heat pumps have increased with split tariffs of 8.7p/kWh for the first 1,314 hours of operation and 2.6p/kWh for any operation over 1,314 hours. Solar thermal technology is also set to benefit from an increased tariff, up from 9.2p/kWh to 10p/kWh.

Clyde MacVeigh, marketing director at Dimplex Renewables, said: “The improvements to the non-domestic RHI scheme are good news for both renewables installers and to organisations looking for an answer to rising heating bills.

“The non-domestic phase of the scheme has suffered from the glaring omission of air source heat pumps since it was first introduced in 2011. It was a bewildering omission of a proven technology which is well suited to commercial retrofit projects, particularly in off-gas areas in place of oil or LPG.

He continued: “Now the inclusion of air to water heat pumps and increased tariffs for ground source heat pumps will finally provide further encouragement for installers and organisations to take advantage of the benefits of high efficiency heat pumps such as the Dimplex LA TU (air source) and SI TU (ground source) ranges.

“With the domestic scheme now finally under way, we are expecting a knock-on effect in the commercial sector as overall awareness of renewable heat technologies and their cost-saving capabilities increases. DECC has listened to the industry and these changes, together with improved tariffs for other technologies including solar thermal, will only give added incentive for organisations to invest.”

Nancy Jonsson, product manager heating and renewables at Daikin UK, said: “We have long called for air-to-water heat pumps to be included in the ndRHI scheme and this announcement is very welcome. air-to-water heat pumps are an excellent way for businesses to meet their heating needs more cost-effectively and sustainably. These changes will not only give customers more choice but will also open up the ndRHI to more applications, providing a real boost to industry.”

ICOM (Industrial & Commercial Energy Association) has also welcomed the changes to the non-domestic RHI published by DECC.

ICOM director Ross Anderson said: “We are pleased with the changes made to the existing tariffs as well as the additional tariffs.

“In particular it is good news for large biomass above 1MW, which sees the tariff doubling to 2p/kWh, ground source heat pumps have a change to the structure but also have increased tariffs and solar thermal sees a modest increase in the tariff. The addition of air source heat pumps, solid biomass CHP and Biogas is also a positive step for the industry.”

Jaga Heating Products has also welcomed the recent announcement of the extension to the non-domestic Renewable Heat Incentive (RHI).

For Jaga, the fact that this second phase of the non-domestic scheme now includes Air Source Heat Pumps (ASHPs) - as well as significantly increasing financial support for eligible GSHP systems – will increase and accelerate demand for these technologies.

Phil Marris, managing director of Jaga Heating Products (UK) said: “This is the news that the renewables industry has been waiting for. Our experience to date is that GSHPs have been preferred for off-gas areas and large country houses, while the benefits of installing an ASHP have been more universally accessible for both Non-Domestic and Domestic properties alike. We are now anticipating significantly increased demand for our range of proven solutions as a result of the Phase 2 Extension announcement. ”

Commenting on the changes to the non-domestic RHI, Jonathan Tedstone business project manager at Baxi Commercial said: “It’s great to see that the government has initiated some changes to the non-domestic RHI and at a time when the media is brimming with content about the launch of the domestic one. Any increase in the tariffs is a positive move for the government to make, ensuring the market is able to support low carbon technologies and alternative heating and hot water solutions.

“There is however, still room for improvement and while the latest announcement should be seen as a step in the right direction, there’s more work to be done. As an industry we will continue to build momentum for low carbon technologies and tariff changes, such as these, will help make low carbon technologies a first choice in commercial applications.

“I would also like to see some support for gas driven heat pumps as an important addition for the future. We are aware that government is currently looking at the market’s attitude towards these solutions but in my view, they form an important part of the scheme in the future.

“Equally, it’s important that we continue to support specifiers and installers and implement training programmes and application support so that these technologies have a fighting chance in the market place. The changes undoubtedly offer the market a competitive and viable alternative to oil and LPG and will be interesting to see how the market responds.

Kensa Heat Pumps has also welcomed the tariff increases for ground source heat pumps. Commercial director Chris Davis said: 'The uplift to the non-domestic RHI ground source heat pump tariffs will undoubtedly kick start the market for a technology which up until now has seen very low uptake under the RHI. 'Ground source heat pumps are a well-established technology, with proven energy cost and carbon saving credentials, so the enhanced tariffs will level the playing field in the market compared with other renewable heat technologies and ensure ground source heat pumps can be considered a viable and financially attractive proposition for businesses, public sector organisations, care homes, schools and many other non-domestic applications.'