Three cheers for RHI…at last!



A big relief

Apologies to my many legions of devoted readers for the recent radio silence …I have been finding out fascinating facts about shale gas in Texas with the Energy and Climate Change Select Committee, of which more later. For now I thought I would post briefly on the fact that the renewable heat world is breathing a renewably heated sigh of relief that we finally have details of the Renewable Heat Incentive scheme.

Chris Huhne announced on Thursday that he will shortly be asking Parliament to approve the £850 million tariff scheme, and the full system of RHI payments will be available to households from October 2012. In the interim, we are told, more than a quarter of the first year’s budget is to be guaranteed for up to 25,000 household installations through a “RHI Premium Payment” to encourage take-up. Phase one will also focus on people living off the gas grid, who tend to have both higher fuel bills and use heating fuels with high carbon content.

All good stuff. Solar thermal has emerged as the big winner with a tariff of 8.5p per kilowatt hour, with the smallest rates being paid to tier 2 biomass, including Combined Heat and Power (CHP). The reason for the two-phase roll-out is that RHI will be funded from general taxation as opposed to an RHI levy due to concerns about rising fuel bills. This does mean that the scheme will be much slower to get started, and that industry installers may have to wait some time before they will really feel the benefit of RHI. This is especially frustrating as many had originally hoped that RHI would start at the same time as FITs last year, or at least in April 2011 as was expected.

However, as advocates of the RHI, including myself had been repeatedly fobbed off about when exactly we were going to get details of the scheme for months, there is a certain amount of relief that it is now set out in black and white.

So, if the scheme really is going to be rolled out as described by DECC, and hard to reach homes begin to see the benefits of the phase one premium payments in June, it will certainly be a bit late, but a lot better than never.