Out-Law / Your Daily Need-To-Know

World's first renewable heat incentive launched in UK

19 Jul 2011, 11:34 am

Organisations that use eligible renewable energy sources to generate heat rather than fossil fuels will have the ability to claim financial incentives for the first time, the Government has announced.

The Government has launched the Renewable Heating Incentive (RHI) scheme, which will provide long term financial incentives and support to applicants such as schools, hospitals and large offices choosing qualifying technologies, such as biomass burners, over traditional fossil fuel heating systems.

It will also offer money and incentives to householders for any heat generated from eligible renewable energy sources, such as solar panels or heat pumps, from 2012.

The Government claims the scheme is the first of its kind in the world.

The policy has been introduced to help the UK meet its EU renewable energy targets, requiring a 12% share of heat generation from renewable sources by 2020.

The Climate Change Act 2008 also sets a legally binding commitment for the UK to reduce its greenhouse gas emissions by 80% by 2050.

Government figures indicate that heating accounts for 47% of total UK energy consumption, and 46% of the country's carbon emissions.

"Renewable heat is a largely untapped resource and an important new green industry of the future," said Chris Huhne, Secretary of State for Energy and Climate Change, launching the scheme. "It will help the UK shift away from fossil fuel, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies."

The RHI will provide long-term, guaranteed financial support on a quarterly basis for renewable heat installations for the next 20 years once accredited by Ofgem. Phase 1 of the RHI will target the non-domestic sector in 2011 while a full system of RHI payments will be available to householders from October 2012 to tie in with the Government's proposed "Green Deal".

Financial support will be available to organisations installing new equipment and those whose equipment was installed after 15 July 2009. Payments will be claimed by, and paid to, owners of installations through energy regulator Ofgem.

Householders will be able to take advantage of additional ring fenced financial incentives to cover the cost of installing green heating systems though the Renewable Heat Premium Payment.