Renewable Heat Incentive in the social housing sector

How can policy be changed to encourage uptake of renewable heating systems

We looked at how social housing providers are using the renewable heat incentive (RHI) – a subsidy to bring the cost of renewable heat technologies in line with more conventional heating systems, like new gas boilers.

Click here to download the report.

This work was part of a wider evaluation for the Department of Energy and Climate Change (DECC) of the parts of the RHI that apply to domestic settings that we carried out in partnership with NatCen Social Research and Eunomia Research & Consulting.

The RHI is part of government policy to deliver their carbon emission reduction targets. Increasing the uptake of renewable heating technology will help to do this, but as relevant policies are designed with environmental benefits and not affordable warmth in mind, they aren’t well tailored to encourage adoption of renewable systems in the social housing sector.

Dr Nick Banks, who led the work at CSE, explained why social housing providers are unusual stakeholders in the domestic renewables market:

“Providers own a lot of property and so their procurement decisions have a big impact. But they are all charities or public sector organisations and so finance underlies their decision making – they need to provide affordable housing that’s affordable to run. Renewable source systems can increase fuel bills for tenants, and any policy needs to remedy this to make renewables a viable option in the social housing sector.”

We sought to find out how social housing landlords can be encouraged to install renewable technologies. How does the organisational decision making take place? What’s holding back acceptance? How can we use what we have learned from the early adopters to incentivise others to use renewable technology?

To do this, we interviewed 32 landlords from housing providers of varying size and with different governance structures (some local authorities, some housing associations). The report dispels some of the myths surrounding renewable technologies, considers which renewable heating technologies are suitable for different housing setups, and recommends some channels and organisations to disseminate this information so it’s acted upon by housing providers.

CSE carries out a lot of work with social housing providers, giving advice and support to help their tenants to access affordable warmth. We have also studied the factors influencing energy behaviours and decision making in non-domestic settings, such as in the asset management teams of housing associations. This practical experience and knowledge of behaviour change, along with significant expertise on renewable technologies (for example, see ‘Common Concerns about Biomass’) meant we were ideally placed to undertake the qualitative evaluation.

Findings

Tenant wellbeing is the primary concern of most housing providers, so any new heating system needs to be affordable and easy to run. Heating systems covered by the RHI include those powered by heat pumps (air source, ground source or water source), biomass boilers and solar thermal systems.

Price considerations

Some providers choose renewable systems regardless of the subsidies on offer, as the cost per unit of power is comparable to the price of a unit of conventional heat i.e. from a boiler powered by mains gas.

For landlords that remain unconvinced, these are some of the financial factors that affect their decisions:

  • Housing providers plan their spending years in advance. They need assurance of subsidy levels so they can assess if they can afford to include renewable technologies in their future investment plans.
  • Some renewable systems are expensive to run and maintain. For example, the cost of fuel for a biomass burner can make it unaffordable. 
  • Air source heat pumps have a reputation for being expensive, as early models were very inefficient. The efficiency is now on par with other technologies, but bills can rocket in poorly insulated properties, as the pumps have to provide heat at a higher temperature.
  • Solar thermal only provides hot water, not an affordable central heating system, and so is generally dismissed by providers.

Practical considerations

Social housing that is off-gas (i.e. not connected to the mains gas supply) is a big potential market for the renewables industry, as renewable heating systems are often the most practical option. This is partly because of the drawbacks to non-renewable alternatives, such as expense (electric heating, oil and propane gas), and impracticality (electric storage heaters are hard to control; solid fuels are difficult to store and manoeuvre).

However, renewable options also have practical hurdles. For example, ground-source heat pumps are unpopular because of space demands. There’s rarely enough room for machinery to access installation sites.

Air source heat pumps require bigger radiators to spread the heat, and tenants need to be shown how to get the best from their heating system (they need to understand that you don’t get the comfort you get from a radiator that’s noticeably warm to touch, or they may unnecessarily increase the heat output). The external units are also at risk of vandalism, a valid concern for the many social housing properties in areas with high crime rates. Still, these pumps are easy to use and maintain and have become the most popular renewable technology amongst social housing providers.

A big drawback to biomass systems is the lack of space to store fuel – where would tenants living in a flat keep their fuel source? These systems are also inappropriate for vulnerable tenants (elderly people and those with poor mobility) who can’t lift materials to refuel their boilers. Without education, systems are used incorrectly and are made ineffective or damaged because of this. There have been incidences in biomass trials where people have run out of approved fuel and burnt whatever is available, like the wooden pallets used to transport the fuel.

Spreading the word

Sharing experiences of renewable technologies is vital to encourage the uptake. Landlords are well networked and there are trade associations and procurement organisations that will test and suggest products. As a result, changes are often implemented on the recommendation of contacts. However scare stories travel further and faster than positive experiences. These networks should be used to circulate to encourage social housing landlords to adopt renewable heating technologies that meet their affordable housing criteria and charitable aims.

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