DECC unveils updated RHI scheme

The Department of Energy and Climate Change (DECC) has announced updates to the non-domestic Renewable Heat Incentive (RHI) scheme following a consultation in July 2012.

In addition to the updates, DECC has also set out a long-term plan to ensure the scheme for commercial, industrial and community organisations remains financially sustainable.

Under the updated policy published today, DECC has set out a fixed annual budget for each year of the RHI and intends to introduce a degression based approach which will see tariffs available to new applicants being gradually reduced if uptake of the technologies supported under the RHI is greater than forecast.

Monthly updates on progress towards triggers will be published online and one month’s notice will be given before any reductions are made to the tariffs for new applicants.

Among other updates in the new policy, tariff reviews of the non-domestic RHI have been scheduled for 2014 and 2017 to provide certainty for investment, though these are just proposed dates for now. It also sets out the conditions under which an earlier review would be undertaken.

Meanwhile, metering requirements will be simplified to reflect feedback received from participants.

Commenting on the updated policy, Greg Barker, the Climate Change Minister, said: “I am fully committed to ensuring our Renewable Heat Incentive helps as many organisations as possible get on board with a range of exciting sources of renewable heat, and at the same time stays within its means. That’s why we are introducing a new, flexible way to control spending, alongside some further improvements to the scheme.

“This is however just the first step on our journey to safeguard longevity, provide certainty to industry and sustain growth under this scheme.

“We are also continuing to explore whether the tariffs we offer are set at the best levels to encourage further uptake, looking at how we can open up the scheme to new technologies, and considering the right approach to encourage householders to invest in renewable heat.

“We are continuing to work with industry and others on our plans and will be making announcements about our proposals for support as soon as possible.”

The RHI was launched for the non domestic sector in November 2011 and over 1300 applications have been received to date, with around £24million worth of RHI payments expected to be paid out in this financial year.