Air source for the non-domestic RHI

On the 4th of December 2013 the government announced some proposed changes to the commercial RHI. There was a generous increase in the tariffs for Ground source (up from 4.8 pence per kWh to 8.7p) and Solar thermal (from 9.2p to 10p) installations. And the announcement we had all be waiting for – the new support for air-water heat pumps at 2.5p per kWh.

It is a little more complicated than the domestic RHI to work out what payments will be under the commercial RHI, and therefore harder to set a client’s expectations on the payback and commercial feasibility of a project. Some renewable technologies operate on a tier structure whereby you get a higher for 1314 running hours per year and thereafter a different, lower payment applies. For air-water source however there is a flat tariff. Moreveover, payments are index-linked and are subject to change (this is also true of the domestic RHI). If you need help modelling the performance of a potential system please do contact us.

The support for air source came into force on the 28th May 2014 and there are a number of reasons why commercial properties might choose this route. Firstly, air source technology has a relatively low impact on a building – a consideration for leased buildings which need to be returned to their owners in the same state that they were received. Units are small and can be placed outside. As commercial RHI systems are metered, it is also possible to run a bivalent system, so that any existing infrastructure can be left in place.

Secondly, air source heat pumps have a lower up-front investment cost than ground source heat pumps. If I am a small but growing business in my converted barn unit, out-of town and off the gas grid, then air source could well be attractive as I look at my growing oil or lpg running costs. I won’t have the up-front cash for a large investment in boreholes or ground loops – even if I planned to be here for the next 20 years (the length of the incentive) or had the land available to place them.

So let’s look at what commercial installations of air source need to consider. The first issue is that to qualify for the incentive an installation must run at a COP of 2.9 or above. In short it must be efficient, and to be efficient heat pumps must run at low temperatures. This is not as daunting as it sounds – I have installations running well above the required efficiency set at 57 degrees – but this is about the limit in my view. And this does mean that for space heating pumps need to be sized carefully to manage the intermittent heat patterns of many offices. Too small a pump and your response time will be poor; too large and your efficiency will be lost. The choice of emitter is also important here; if the property is heated by air movement you will need significant upgrading of the system to make it work with the low temperatures required by an efficient heat pump. Radiators will also likely need upgrading if they have been sized to run with a traditional high-temperature system.

Another essential consideration for the efficiency of a pump is the kind of work it will be required to do. For installations where most of the demand is for space heating, inverter-driven air source heat pumps will be the choice of technology. When it comes to businesses that require a lot of hot water, like a hairdressers, leisure centre or camp site, then I recommend an on/off compressor machine to ensure the best efficiency (and the longevity of the heat pump). Inverter-driven heat pumps are tuned for high efficiency in cold-weather conditions; perfect for heating, but not for generating hot water year-round.

On/off air source heat pumps can also be the correct choice to take advantage of process heat created by the operation of a business to make them even more efficient. If you are a bakery with ovens, or an IT business with lots of servers, an air source heat pump can recover the waste heat from these activities for heating the rest of your building. In most cases the cold exhaust air will then be simply ducted away – but for the case of computers that need cooling the heat pump can perform a dual role.

It is also worth underlining that to be eligible the heat generated must be “useful” heat. It must be supplied to meet an economical, justifiable heating requirement that would otherwise be met by a fossil fuel boiler and it must be supplied to a fully enclosed structure. Acceptable uses are heating, hot water or process heat. This requirement for heat to be useful also means that wasted heat cannot be counted as eligible for the incentive. For example, some installations may require long lengths of distribution pipework that run from one building to another and this may require additional metering. This is because you are not allowed to recieve tax payers money on the heat lost during this transfer.

As a final note on eligibility, if a business is run from a home (such as a bed and breakfast or family hotel) the decision about whether you should apply for the domestic or commercial tariff depends on whether you pay business rates for that property.

Finding the air source product for commercial applications is many ways easier than it is for domestic situations. For a start, many commercial properties have 3 phase electrical supply. This makes a far wider range of products available, as most heat pumps are designed for markets where this is the norm and the UK market is still not large enough to have justified manufacturers to invest in custom products for a wide range of applications. Secondly, for the commercial RHI there is no requirement for products to be MCS approved, which widens the available pool of products again. Products that as yet have too niche an appeal in the UK market to make them a priority for the MCS approval process will be available to choose for commercial applications.