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Yet More Delays Befall the Renewable Heat Incentive

By Katie Anderson on March 28, 2012

The British Government has put on hold plans to implement the second stage of the Renewable Heat Incentive, its flagship scheme for encouraging households to generate renewable heat.

According to the Department of Energy and Climate Change (DECC), the Renewable Heat Incentive (RHI) will be delayed at least until summer 2013 because further consultations on controlling costs are necessary. The delay represents another blow to Prime Minister David Cameron’s promise to run the ‘greenest ever’ government.

The scheme was designed to provide households with a pecuniary reward for generating heat and hot water from renewable sources. Qualifying households expected to receive approximately 8.5p/kWhr for generating and using such energy, while a further tariff would have been available for those who managed to export surplus heat. Following the government’s decision to halve solar subsidies, news of the delay will upset many people who have invested in renewable heating technologies.

Micro-generation central heating systems, biomass boilers, solar water heaters and ground source heat pumps would have enabled thousands of homes to profit from becoming more environmentally friendly under the RHI. The situation for next year is now unclear. What is clear is that the British Government hopes to avoid the same problems that arose when it decided to cut solar subsidies with little warning – a decision that was successfully challenged at the High Court.

Explaining the decision to delay the Renewable Heat Incentive, Climate Minister Greg Barker commented: “Putting in place cost control measures for the RHI is the prudent thing to do, given this is millions of pounds of taxpayers’ money at stake and taking on board the lessons learned from the feed-in tariff scheme.

“We will ask industry for its views in the summer and in the meantime will arrange for interim measures to be in place to manage the scheme’s budget. DECC will launch a formal consultation in the summer to explore the different policy options to ensure the RHI stays within its budget. This could include a system to lower tariffs as the scheme grows”.

Paul Thompson, of the Renewable Energy Association, remarked: “To launch an official consultation on bringing the shutters down, having only just fired the starting gun on the RHI, is premature to say the least”.