The Department of Energy and Climate Change (DECC) has revealed that it will launch a second phase to the Renewable Heat Premium Payment (RHPP) scheme, while delaying the rollout of the domestic Renewable Heat Incentive (RHI) until 2013.
The RHPP scheme, which gives money off renewable technologies such as biomass boilers and solar thermal panels, will be launched on April 2 this year and will be worth £10 million more than the existing scheme.
The second phase will also include an £8 million competition for communities to apply for grants to encourage community groups to install renewable heat technologies. There will also be a £10 million competition for social landlords.
The scheme will continue to be administered by the Energy Saving Trust.
Announcing the news, the Climate Change Minister, Greg Barker, said: “The new Renewable Heat Premium Payment scheme will be bigger and better than the original.
“We’re increasing the budget from £15 million to £25 million, for the first time we’re including community schemes and there’ll be more social housing schemes that can benefit. Those people who are reliant on expensive oil or electric heating should consider applying to the Premium Payment scheme to cut their fuel bills in the long term.
“Generating heat from renewables will not just cut carbon emissions; it will also help create a market in developing, selling and installing kit like solar thermal panels or heat pumps.”
Karen Lawrence, Director of Delivery at the Energy Saving Trust, said: “Our aim is to empower householders by giving them the right tools and advice to help them reduce both their energy usage and bills.
"Without a doubt, one of the main barriers that prevents people from taking the plunge is the up-front capital cost. The announcement of the second phase of the Government's Renewable Heat Premium Payment (RHPP) scheme not only offers homeowners help with the initial costs, but it also provides them with access to heat technologies that can help them to reduce their energy bills, year on year.
"We are encouraged by the interest in the first phase of the schemes - particularly the social landlord scheme - and look forward to building on this."
However not everyone viewed this as a positive move. The Chair of the Solar Trade Associaiton’s Solar Thermal Working Group, Stuart Elmes, comments, “The previous incarnation of the RHPP was hopelessly undersubscribed. We are not convinced that this ‘bigger and better’ RHPP will be sufficient to spark increased uptake of solar heating technologies.”
Furthermore, the Department has also revealed that the second phase of the RHI, which covers domestic applications, will be delayed until 2013. This is bad news for all those expecting the rollout in October this year, however many assumed that this scheme would be delayed.
“DECC has put a lot more energy into supporting renewable electricity than renewable heat – but heat is half the problem if we are to meet our carbon targets. This unbalanced approach represents a missed opportunity,” continued Elmes.
“Solar heating manufacturers, suppliers and installers in the UK stand ready to deliver with the right support structure. We call on DECC to accelerate the timeline for RHI2 and unleash the potential of solar heating.”
While Clare Hierons, Head of Climate Consulting, said: “It is disappointing that there’s still uncertainty around the future of RHI for domestic properties. This incentive could help thousands of households in the UK take advantage of renewable heat as well as cutting carbon emissions, but we fear that many people will be put off investing in this technology while they don’t know for sure when they will receive RHI payments. For the sake of those people still waiting for RHI payments and households that want to invest in clean energy we urge the Government to complete the consultation around the future of RHI as soon as possible.”
DECC also launched a consultation on interim cost control for the RHI, with a proposal which would give Government the power to suspend the scheme if it looks like it will exceed the annual budget.