Baxi has broadly welcomed the Government’s publication on Thursday 10th March of its Renewable Heat Incentive (RHI) policy document.
We are encouraged by the main thrust of the RHI documentation. The Department of Energy and Climate Change (DECC) has clearly learnt the important lessons from the Feed-in Tariff (FIT) framework and created an approach which will ensure technologies can be assessed in real life installations. The £15m funding could create around 25,000 installations under the Renewable Heat Premium Payments which will demonstrate the benefits renewable heat can deliver by 2015.
However, there is still clarity needed on key areas. We are disappointed that the definitive tariff levels for the domestic sector have not been revealed and we look forward to the publication of this information in May 2011. We also need detail on how dwellings will be assessed as eligible and whether the RHI tariff will be metered or deemed.
On the plus side, we are pleased to see that a clear link between RHI and the Green Deal has been expressed. Whilst there is a delay with implementation, the Government has honoured the commitment that installations completed after 15th July 2009 will be eligible for payments from 2012.
The RHI policy document sets out the arrangements for the £860 million scheme, which will provide long-term financial support to renewable heat installations to encourage the uptake of renewable heat. DECC is aiming for the regulations which underpin the scheme to be approved by Parliament in summer 2011 and the scheme will be introduced shortly thereafter. The scheme is expected to increase green capital investment by £4.5 billion up to 2020, stimulating a new market in renewable heat. DECC believes that the incentive will increase the number of industrial, commercial and public sector installations by seven times to 2020.
The RHI Policy Document states that a full system of RHI payments will be available to households from October 2012 and in the interim, more than a quarter of the first year’s budget to be guaranteed for up to 25,000 household installations through a “RHI Premium Payment” to encourage take-up.
The Government plans to publish details of the “RHI Premium Payment” and how this will apply in May 2011 and will consult on the RHI tariffs that will apply from October 2012 later in the year. Further detail of the scheme can be found on the DECC website.