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Fears over the Renewable Heat Incentive scheme

Last updated on 11/05/2016

 

How long can the Renewable Heat Incentive (RHI) programme continue to enjoy the level of support it has been receiving from Government? There is a worry that subsidy rates could be cut back. Some fear it could be even be closed to new entrants.

 

Currently the scheme provides money for both the domestic and non-domestic sector. The money helps subsidise heat generation produced from sustainable forms of energy such as biomass.

 

Across the water concern mounted over the GB scheme when the Chancellor announced in his Autumn statement that reform of the RHI would lead to a reduction in spending of £700 million but confusingly it wasn’t made clear just how the money would be saved.

 

In a statement the Department of Energy and Climate Change (DECC) enlarged on Mr Osborne’s comment reassuring the renewable sector that support would continue for at least a further five years but repeating the warning on spending. “The government will increase funding for the Renewable Heat Incentive to £1.15 billion in 2021 to ensure that the UK continues to make progress towards its climate goals while reforming the scheme to improve value for money, delivering savings of almost £700 million by 2020-21.”

 

DECC does not pay for the RHI scheme here. It's funded by the Treasury which last Autumn announced a cut in support. If the scheme were to continue in its present form it would require DETI to step in. With constrained budgets that would be a challenge. 

 

An industry source in Northern Ireland has said that installers here are worried that the RHI could be pulled at short notice. That might be unwarranted but it would take a brave person to rule out any cuts in the scheme which has proved over the years to be a huge success


DETI have yet to respond to enquiries about the scheme.









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