The domestic phase of the Renewable Heat Incentive (RHI) has been delayed AGAIN by the Department of Energy and Climate Change (DECC) and will not now launch until Spring 2014. The department blamed the delay on ‘large volumes of data and evidence’ from its recent consultation on the scheme.
“We need to analyse thoroughly [the data and evidence] to feed in to our plans in a considered manner and incorporate into our evidence base” a spokesperson said. Meanwhile, Energy and Climate Change Minister Greg Barker stated that the RHI is a key part of the government’s approach to cutting carbon and driving forward the UK’s transition to sustainable, low carbon heating initiatives.
The delay was announced as Ministers released more details about those technologies that would be in line for an increase in tariffs. Ground source heat pumps and large-scale biomass have both been approved for tariff increases following an underspend in the non-domestic RHI budget for 2012-13 amid calls by industry for better support for certain technologies.
The RHI was introduced in November 2011 as the main subsidy scheme for renewable heating systems in the UK and was set up in response to the Energy Act 2008 along with Feed-in Tariffs. The business phase (Phase 1) is already up and running and offers regular support to businesses and commercial enterprises who install renewable heating systems on their premises. The domestic RHI was originally supposed to have been launched in October 2012 but it was affected by an overspend on the solar electricity tariff. The government chose instead to launch the Renewable Heat Premium Payment (RHPP) to cover the gap until the domestic RHI became available. Now that a second delay has been imposed, the department has said it will extend the RHPP until next spring. The government has also said that it will launch a new set of initiatives to encourage uptake of renewable heating including a £9 million support package for local authorities across the UK intended to get heat network schemes working and provide training for installers and apprentices.
“The early feedback is that the market is bitterly disappointed with this delay” said Dave Sowden, Chief Executive of the Micropower Council. “It is becoming increasingly difficult to give positive messages about whether the Coalition as a whole remains committed to domestic renewable heat, despite the seemingly good intentions of those within DECC. People will sit back and question whether this is going to happen. There are not enough positive signs coming out of government that they are serious about the domestic RHI.”
However, Tim Minett, CEO of biomass company CPL Distribution, said that the scheme clearly isn’t working as intended and has been extremely disappointing to date. Mr Minett gave evidence to the Energy & Climate Change Select Committee concerning the RHI and added that the industry will welcome a review of the scheme since the tariffs have actually been too low to offer an effective incentive.
“The upshot is we are nowhere near the levels of uptake predicted” Mr Minett said. “The Government was originally aiming to have 72,000,000 megawatt hours (MWh) worth of renewable heat capacity installed by the end of 2015 in order to hit its Renewable Energy Directive targets for 2020. At present, just 118,000MWh has been generated and paid for under the scheme, which is less than 0.2 per cent of the total required.”
The Solar Trade Association (STA) has called on the department to double the value of the RHPP in order to make up for the delay to the domestic RHI.
“We need a boost for our UK manufacturers and installers so that we have a strong supply chain ready for the introduction of the RHI next year” said Paul Barwell, the CEO of STA. “Increasing the solar thermal RHPP from £300 to £600 would not cost any more as install rates have halved since the peak in 2010. While this latest delay to the domestic RHI is undoubtedly an enormous disappointment to the solar thermal industry, we remain committed to working constructively with DECC to ensure that there is no further slippage. We must ensure that a successful domestic RHI is finally launched next spring.”
Mr Barwell added that it is extremely important that DECC quickly provide certainty to the market in order to reduce the negative impact imposed by the delay.
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