Climate change minister Chris Huhne MP announced the beginning of the Renewable Heat Initiative this morning, March 10.
The Initiative, which aims to reduce emissions and the UK’s reliance on fossil fuels for heating, gives a government-funded financial incentive to encourage the installation of biomass, ground source and water source heat pumps, solar thermal and biomethane. It works in a similar vein to the Feed-In-Tariffs scheme for solar energy.
The RHI will be introduced in two phases – the first focusing on the industrial, business and public sector, the second will bring in the domestic housing sector.
RHI tariff payments will start for homes alongside the Green Deal from October 2012 to allow a more whole-house approach to heat production and energy saving.
However, in the meantime, there will be an interim system of Renewable Heat Premium Payments, worth around £15m to up to 25,000 household installations to encourage take-up. Those who do take-up the Premium will then be eligible for a RHI tariff when the Green Deal begins, as will anyone else who has had eligible equipment installed from July 2009.
Huhne said: “Heating accounts for 47% of total UK final energy consumption and 46% of our carbon emissions. We already have the Renewables Obligation and Feed-In Tariffs schemes to help drive an increase in renewable electricity, evidenced by the recent expansion in wind farms and domestic solar panels. The introduction of the RHI will for the first time provide long-term guaranteed financial support for renewable heat installations.
“The Renewable Heat Premium Payments will ensure that before we commit to long term payments in a sector where it is particularly difficult to predict levels of take-up – and levels of performance – of different heat technologies, we manage their roll out and learn more about them, as well as controlling the budget and ensuring the money goes where it is intended. Domestic equipment installed during this period will be eligible for the RHI tariff payments when they are introduced in 2012.”
By 2020, the department for Energy and Climate Control estimates that the renewable heat sector will have grown to include around 13,000 installations in industry and 110,000 installations in the commercial and public sector, supplying 25% of the heat demand in these sectors.
Anything from a pub to a public library, a school to a power plant will be eligible under the RHI to install technologies like biomass boilers, heat pumps and solar thermal. Community projects will also be eligible, provided a single installation is providing heat to more than one house.
The tariffs will be paid for 20 years to eligible technologies that have installed since 15th July 2009 with payments being made for each kWh of renewable heat which is produced.
DECC is also publishing the draft regulations that will underpin the tariff scheme as a working draft, which will be subject to change before they are laid in Parliament. Huhne said that the Department will consider “comments from stakeholders on their practical application.”