UK’s first Renewable Heat Incentive to launch on Monday

Businesses and communities across Britain will from Monday be able to apply for a heat tariff payment, triggering a new era of clean green heat technology, energy minister Greg Barker, said today.

The world’s first Renewable Heat Incentive (RHI) will be open to applicants from Monday 28 November, providing payments for heat generated from renewable technologies including biomass boilers, solar thermal equipment and heat pumps installed since 15 July 2009.

Recipients will be paid up to 7.9p per kWh for biomass boilers, 8.5p per kWh for solar thermal and up to 4.5p per kWh for heat pumps.

Energy and climate change minister, Greg Barker, said: “The RHI will usher in a new era in clean green heat technology. It’s a world first and has the potential to put the UK at the forefront of a vibrant new green technology sector.

“Renewable heat will be a big win for our economy – it will support thousands of green jobs, reduce our dependency on imported fossil fuels, reduce our carbon emissions and help us meet our renewable target.”

The RHI has a key role to play in meeting the UK’s 2020 renewables target, will help reduce the UK’s dependence on expensive imported fossil fuels and will cut emissions by 43 million tonnes of carbon by 2020 – equivalent to the annual carbon emitted by 19 typical new gas power stations. Up to 500,000 jobs are expected to be created in the renewables industry as a whole by the end of the decade.

The start of the scheme follows a short delay while DECC resolved the scheme’s compatibility with EU state aid rules for utility-scale biomass operators. Organisations will be able to apply to Ofgem for support under the scheme from Monday 28 November and will receive payments on a quarterly basis for heat generated over 20 years.

The news was welcomed by the industry. Tim Minett, chief executive of leading UK wood pellet supplier CPL Distribution, said: “We are relieved by today’s announcement. There is no denying that the delays to the Renewable Heat Incentive’s launch knocked confidence among board-level decision makers and a large number of projects to install renewable systems have been stalled as a result.

“On the basis of our own dealings, and feedback from biomass boiler manufacturers, we believe there are at least 250 major investment projects currently in limbo. To put it bluntly, there has been a huge amount of interest in the RHI but in the absence of absolute clarity over the tariff rates, people simply weren’t willing to trust politicians’ assurances given the backdrop of the cuts in feed-in-tariffs elsewhere.

“Those fears can now be allayed thanks to today’s announcement. This should allow us to convert expressions of interest into real signed contracts, and businesses and the public sector will then start to see the real and substantial savings this incentive scheme will deliver. It should deliver some new jobs which are much-needed in the current market.

“With the delays now behind us, this green light for the Renewable Heat Incentive will be a significant stepping stone in the UK’s transition towards a low-carbon economy.”

The Renewable Heat Premium Payment scheme is already up and running, providing money off renewable heat technologies for householders. Vouchers are still available – householders have until 31st March next year to apply.

There will also be support for householders under the second phase of the RHI, the timing of which will be confirmed early in the new year. The government remains absolutely committed to driving the renewable heat agenda not just in the industrial, business and public sector, but in the domestic sector as well.