GSHPs and the Renewable Heat Incentive. Market Context Long term strategic role for heat pumps The 4 th carbon budget ascribes

GSHPs and the Renewable Heat Incentive

www.kensaheatpumps.com

Market Context

Long term strategic role for heat pumps

The 4th carbon budget ascribes a prominent long-term role for heat pumps in achieving binding domestic emissions reductions


Market Context

UK Heat Strategy - “The Future of Heating, Meeting the Challenge”

DECC, 2013

Indicates a clear and strategic role for heat pump technology


Market Context

22m homes in the UK

>4m homes off the gas grid

Those heated by oil, lpg and electricity are the “low hanging fruit”


GSHP’s & the Domestic RHI

Domestic RHI

Aimed at domestic installations

Rewards generation of renewable heat, deemed

RHI pays on Renewable Heat contribution GSHP will always provide

more renewable kWh/yr than an ASHP due to higher efficiency

Higher efficiency also yields larger fuel cost savings



Target market RHI will drive opportunities for

larger, off gas grid properties

Private domestic retro fit

Oil or lpg heated High fuel bills, bulk fuel purchases

Higher heat loads >16kW, single phase electricity

supplies

Existing heat distribution systems

Higher flow temperatures



Benefit 1: Attractive GSHP Tariff /kWh: 18.8p Benefit 2: RHI paid on Renewable Heat contribution.

Higher intrinsic SPF for ground source means higher Star Rating and therefore more renewable kWh/yr Benefit 3: Flat tariff rate structure means Domestic RHI will benefit larger

properties

By definition likely to have more land area

KENSA HAS SINGLE PHASE OUTPUT UNITS UP TO 24kW!!

Benefit 4: No planning or noise (MCS022) issues to deal with!

3 bed semi: 8kWRHI: £11k / 7yrs

4 bed det: 12kWRHI: £17k / 7yrs

5 bed det: 15kWRHI: £20k / 7yrs

8 bed mansion: 24kWRHI: 37k / 7yrs


GSHP RHI Example

5 bedroom house Domestic RHI example for Ground Source Heat Pumps

5 bed property

4-5 occupants

180m2 floor area

Circa 1960’s build

Basic insulation measures – cavity wall, loft, glazing

15kW heat load

Heating via radiators (50°C – 3 Stars)

EPC: 21,000kWh/yr

Land area required (slinkies): 720m2


GSHP RHI Example

5 bedroom house Domestic RHI example for Ground Source Heat Pumps

£1082 per year fuel cost saving vs oil

£2845 first year RHI income

£27,492 combined benefit over 7 years Before index linked tariff increases and fuel price inflation

Typical installation cost: £18,000 Based on slinkies

Payback: 5 years

Rate of return: 11.5%

Kensa On Line RHI Calculator• Website based tool

• Calculates expected RHI and fuel saving benefit under domestic RHI

• Varies results based on geographical location

• Suggests likely land area required for slinkies

• Aimed at helping driving enquiries for installers


Non Domestic RHI

Launched 2011

Includes support for residential district heating systems

Recently uplifted tariffs for ground source heat pumps Increased from 4.3p/kWh to 8.7p/kWh

Payments made over 20 years, based on metering

Includes support for new build

District residential schemes can be combined with ECO funding

More attractive long term rate of return than domestic scheme


Kensa micro-district solution

Individual heat pump at each dwelling

Linked to a communal ground array

New build or retro fit

Capital subsidy provided by Energy Company Obligation (retro fit)

Supported by 20 year income stream through the Non Domestic Renewable Heat Incentive

Technically robust solution

Myriad of operational and tenant fuel cost benefits over other solutions


Traditional district scheme problems

Traditional schemes featuring a central boiler plant are not popular

Difficult to implement as a retro fit solution

Inefficient Heat losses as hot water circulated through the

“district”

Burdensome HA has to manage billing

Bulky Requires considerable space

Expensive Requires back up system to eliminate risk of

catastrophic district-wide failure


Kensa micro-district solution

Ground source heat pump

Kensa high temperature units, installed externally

Micro district heating

Individual gshp per property linked to a shared ground array serving 2+ properties

Technically robust

Smaller number of deeper boreholes

Flexibilty over borehole location

No plant room or central pump

Energy saving

Low cost, low carbon heating and hot water reducing energy bills

Scaleable solution

Can be applied to apartment blocks or clusters of terraced or semi detached houses/bungalows, sheltered accommodation, holiday lets and more…

Renewable Heat Incentive

20 year income stream for district schemes under the non domestic RHI

Energy Company Obligation (Retro fit)

Attractive capital subsidy, especially when displacing electric heating

Simple billing

No centralised billing – each tenant has control over own heating system and energy bill

New Build

New build developments are eligible for the non-domestic RHI

Micro-district costed example

Micro District Ground Source Heat Pump SystemBased on 2 bedroom End of Terrace

Lifetime CO2 savings 87 tonnes

Typical annual running cost saving vs NSH

£450

Total capital cost £15,000Heat pump, ancillaries and installation £3900

Boreholes and ground collector system £6600

New radiator system and DHW cylinder £4100

Design (EPC, borehole design) £400

Existing system replacement costs £2500

ECO funding contribution £3500

Total Net Cost £9000

Total RHI contribution £16,000

Overall rate of return (IRR) 6%

Air Source HP

67 tonnes

£350

£7850£3500

0

£4100

£250

£2500

£0

£5350

£2900

0%


New Builld - Kensa Shoebox

System architecture

Individual ground source heat pump and hot water cylinder in each apartment

Low temperature primary circuit

Communal Ground array

Eligible for RHI payments – considered as district heating

3kW capacity

Small & extremely quiet

Provides heating & hot water

Heat source for Shoebox heat pumps

Multiple boreholes 100-150m deep


District Htg New Build Example

Abbeydale Hall - Luxury new build apartments

4 blocks of 3 apartments

Each shares a communal borehole field of 3 x 130m boreholes

3kW Shoebox heat pump installed in each flat

Developer retains the non domestic RHI


Reasons why GSHP’s win!

Domestic RHI

Very attractive domestic RHI tariff rates and high renewable heat content

Compelling rates of return / payback, especially in larger properties

Kensa range >16kW single phase models – ideal for larger domestic properties

District and Non Domestic RHI

District residential heating solutions possible using the Non Domestic RHI

“Decentralised” district systems possible by linking ground loops – not possible with any other technology

Opportunity to apply in new build

Opportunity to tap in to ECO funding (district retro fit)

PLUS OF COURSE…

Planning exempt (permitted development rights)

No noise nuisance

Lowest possible running costs and long life expectancy

Documents

GSHPs and the Renewable Heat Incentive. Market Context Long term strategic role for heat pumps The 4 th carbon budget ascribes