UK Waits Another Year for Renewable Energy Incentives to be Introduced

The Department of Energy and Climate Change has revealed that the rollout of the domestic Renewable Heat Incentive (RHI) will be delayed for a year following the controversy surrounding the current solar power Feed-in Tariff.

The RHI scheme would financially reward home owners who opt to generate their own heat or hot water using renewable energy sources, such as heat pumps or solar panels. It would work much in the same way as the FiT scheme did; providing financial incentives for householders to use renewable energy, and give the renewable energy industries a leg up.

The delay has been introduced to allow the DECC time to work out how funds will be managed in light of recent setbacks. The solar electricity incentives proved more popular than expected, using up the funds set aside for reimbursement and leading to a cut in payments earned through the Feed-in Tariff.

The £865m scheme was to be rolled out this month, as the second part of government plans to boost Britain’s renewable energy use and installations. This phase would work much in the same way as the FiT scheme, paying consumers for heat and hot water generated by themselves, and also paying them for any extra heat that is passed on to other consumers. The payments would run for 20 years, again similar to the highly popular FiT scheme.

The main concern with this scheme is that the funds would come directly from the Treasury, unlike previous schemes which were funded by energy companies. The DECC is now proposing an ‘emergency brake’ measure, which would cut the RHI scheme if payments became too high for government funds to sustain. A formal consultation will be launched this summer to explore different options available to help keep the RHI scheme within budget limits.

Some believe that the decision to delay the scheme is premature, and don’t see any danger of renewable heat sources becoming as popular as solar electricity, but it seems the DECC and the government as a whole are keen to avoid any mishaps after this year’s mistakes.