The Renewable Heat Incentive is to be cut by 5 per cent for industrial and commercial organisations, following a similar model to the Feed-in Tariff scheme for solar panels.
RHI payments will now fall by 5 per cent to new applicants if the number of installations exceeds the government’s target by 50 per cent.
The RHI is an incentive scheme to encourage homes and businesses to investment in renewable targets. The UK is legally obliged to reach its targets to reduce its carbon levels.
DECC says the plan laid out will ensure that the scheme does not go over budget, however will draw concerns about the possible impact on the uptake of renewable incentives if incentives are withdrawn.
What’s including in the RHI?
The non-domestic RHI scheme supports heat from sources defined as renewable in the EU’s Renewable Energy Directive (RED). These are:
- biomass boilers, including combined heat and power (CHP) biomass boilers
- ground source heat pumps
- water source heat pumps
- deep geothermal heat pumps
- all solar thermal collectors
- biomethane and biogas
Greg Barker, Energy and Climate Change Minister said: “I am fully committed to ensuring our Renewable Heat Incentive helps as many organisations as possible get on board with a range of exciting sources of renewable heat, and at the same time stays within its means.
“That’s why we are introducing a new, flexible way to control spending, alongside some further improvements to the scheme.
“This is however just the first step on our journey to safeguard longevity, provide certainty to industry and sustain growth under this scheme.
“We are also continuing to explore whether the tariffs we offer are set at the best levels to encourage further uptake, looking at how we can open up the scheme to new technologies, and considering the right approach to encourage householders to invest in renewable heat.