Solar thermal costs to be reduced by RHI

September 12, 2013

Solar thermal systems could see a noticeable fall in costs of up to 30 per cent if it reaches the same market presence as solar photovoltaics (PV), new research suggests. 

According to the Solar Trade Association (STA), if the market sees a tenfold expansion, there could be reduction in costs for the technology. 

The launch of the domestic Renewable Heat Incentive (RHI) could prove to be the boost the industry needs, and the STA believes it could kick start demand for solar thermal technologies. 

Solar heating installations have doubled in the two years between 2008 and 2010, but then saw a fall in the following years. 

With the cost reductions in PV technology and support for solar power generation from the government in the form of the feed-in tariff, the solar panels market has been supported.

Following the introduction of the RHI and the possibility of matching the presence of the solar PV market, the STA suggests that equipment costs could fall as much as 21.6 per cent, while non-equipment costs for thermal technologies could also see a 35.8 per cent reduction. 

The domestic RHI works in very much the same way as the feed-in tariff does, providing households with payments depending on how much clean and renewable energy they generate. 

Chief executive of the STA Paul Barwell has said that the solar thermal market is ready to meet its potential, and will step up to compete with solar PV and micro-wind technologies. 

“The good news is that the domestic RHI is now just round the corner and the STA has secured a workable tariff and regulatory framework for solar thermal, so industry now has a great chance of regaining the lost momentum," he said.  

"As costs come down, so too will the tariffs, as the government seeks to minimise policy costs and stabilise consumer returns. So the message here is not that customers should wait for cheaper systems, but that from a macroeconomic perspective, solar thermal is ready to realise its mass market potential and make a major, cost-effective contribution to the UK’s renewable energy objectives.”

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