Renewable Heat Incentive

Oral evidence complete

In order to meet its Renewable Energy Directive target of generating 15% of energy from renewable sources by 2020, the Government "anticipates that around 12% of heat will need to come from renewable energy". However, to date, uptake of renewable heat technologies has been disappointing; renewable heat has recently been described as "the sleeping giant of UK renewable energy policy". The Government expects that a domestic RHI scheme will contribute significantly towards the Renewable Energy Directive.

Domestic Renewable Heat Incentive

The domestic Renewable Heat Incentive (RHI) programme is due to be introduced in summer 2013 while a non-domestic RHI has been in operation since November 2011. The Government was expected to launch a domestic scheme in October 2012 alongside the Green Deal (which were also delayed to January 2013). The launch of the domestic scheme was, however, postponed following fears that the scheme would exceed its budget.

DECC’s latest proposals indicate that the domestic RHI scheme will be open to all householders who replace their current heating system with certified renewable technologies or have done so since 15 July 2009. It is intended that recipients will receive support for deemed heat generated through tariff-based payments over a seven year period. Households will, however, be expected to finance the upfront costs of installation themselves through personal funds or a loan.

Consultations have recently closed on the Government’s proposals for a domestic RHI scheme and extension of the non-domestic RHI scheme. The domestic RHI consultation document sought opinions on the design of the scheme and covered eligibility criteria, indicative levels of support and assurance mechanisms.

Terms of Reference

The Committee will hold an evidence session on 26 March and invites short submissions of evidence (which will be used to identify witnesses for oral evidence) on any or all of the following terms of reference:

1. Will the proposed degression mechanism strike the right balance between ensuring value for money for taxpayer and providing businesses and households with the certainty they need to invest in renewable heat technologies?

2. Is a phased roll-out approach appropriate or should the RHI be a national scheme from the start?

3. How could the RHI be used to help off-grid households living in fuel poverty?

4. Is the application process for domestic RHI sufficiently straightforward and has the scheme been sufficiently publicised?

5. Should the Government involve third-party trusted messengers, such as charities, consumer groups, community organisations, local authorities in developing and delivering the customer journey for RHI and what would be the best way to do this?

6. How are the proposals for domestic RHI likely to interact with existing policies such as the Green Deal and the Energy Company Obligation (ECO)?

7. Does consumer protection need to be strengthened to combat potential miss-selling and how should this be done?

8. Is there a danger that a gap in support will emerge between when the Renewable Heat Premium Payment (RHPP) will end in March 2013 and the commencement of the domestic RHI scheme in the summer of that year, what impact might this have?

9. What barriers might prevent the Government from announcing RHI implementation plans by summer 2013 and what impact would further delays have on the sector?

10. What lessons can learned from the implementation of the non-domestic RHI scheme?

The deadline for the submission of written evidence is 21 February 2013.



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