Government fears run on budget of Renewable Heat Incentive despite sluggish start

The government has been told to stop ‘panicking’ about possible pressures on the budget for its renewable heat incentive scheme and get on with sorting out a permanent cost control measure.

This week the government closed its consultation on cost control mechanisms for its Renewable Heat Incentive (RHI).

The consultation proposed that the scheme, which has been running since November, could close to new entrants for the rest of the financial year with just a month’s notice if 80% of the budget became allocated.

Like the solar feed-in tariffs, the RHI offers payments to installers of heat pumps, biomass boilers, solar thermal systems and other renewable heat generators for every MWh of heat they produce.

However, the scheme has gotten off to a very slow start. As Building reported last month, less than 1% of the extra renewable heat capacity needed this year to keep the government on track to meet its targets for the RHI has been installed and accredited in the first three months of the programme.

A lack of publicity and poor information from applicants were blamed for the low rate of applications and approvals respectively.

Bill Wright, head of energy solutions at the Electrical Contractors Association, said the Department of Energy and Climate Change (DECC) had been “panicked” by the run on the solar electricity feed-in-tariff (FIT) budget, resulting in the consultation on interim cost control measures for RHI, which he said was unnecessary.

“Why not just do it properly [and set up a permanent cost control mechanism] the first time and get it right,” he said. “The uncertainty this brings is bad for the industry.”

But David Frise, head of sustainability at the Building and Engineering Services Association, said: “I think this is a very pragmatic consultation. DECC would be crucified if there’s a repeat of the FIT fiasco.”

Frise said he was not concerned about the effect such a measure coming into force might have on the industry because of the low take-up of the scheme.

 

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