What is the Renewable Heat Incentive?
General background
The government aims to ensure that 15% of all energy used in the UK is produced from a renewable source by the year 2020. In order to help the government achieve this target, they are looking to homeowners and small businesses to help them out by installing heating systems that derive their energy from renewal resources. In return homeowners and businesses will earn a fixed income for doing so. This is known in parliament as The Renewable Heat Incentive.
The Renewable Heat Incentive was confirmed by the coalition Government in September for launch in July 2011.
The coalition government has set aside £860M to fund this scheme over the next five years to try and catch up with the rest of Europe who are way ahead of the UK with regards to renewal energy resources.
What will the scheme do?
The scheme is expected to paying a set amount each year to UK homeowners who replace their existing fossil fuel heating system (gas, coal, oil) with a renewable energy system such as wood fuel or solar thermal.
How does this scheme work?
The types of renewable heating systems that are eligible are solar thermal panels, heat pumps or a biomass (wood burning) boiler. Even though the scheme is not due to start until 2011, any system installed between now and next April will be eligible and can provide you with payments.
For example, if you installed a basic wood pellet boiler system, the government could give you £27,000 over five years which would not only pay for a basic installation (£8-10K) but also fuel costs and a potential surplus. This means you could walk away better off for having participated in the scheme.
The Government are not proposing to measure the heat generated, instead they will estimate how much heat will be generated and pay annually.
Recently the Energy Secretary, Chris Huhne, strengthened his support for a renewable heat incentive. There has been a lot of confusion about the future of the scheme when he "forgot" to put in the coalition negotiations. With all of the multi-sector cuts recently announced, it is easy to understand people's apprehension with regards to whether this scheme would survive the chop. However the government understands that they will not be able to hit their 15% renewable target without the heat measures, so the scheme is due to be clarified and guaranteed.
Questions and Answers
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