Renewable Heat Incentive: Government confirms tariff extension for businesses and households

The government has today confirmed it will extend the deadline for companies and households to deploy projects under the Renewable Heat Incentive (RHI) scheme following the closure of the most recent phase of the popular subsidy programme earlier this year

Projects that secured support through the RHI's second allocation round had until January 2021 to be up and running so as to secure payments through the scheme for the green heat they generate.

However, with many projects having been delayed by the lockdown, the government today announced that non-domestic RHI scheme applicants will get an extra 14 months to complete projects, while domestic RHI projects will get a 12-month extension.

The government said the move will bring vital clarity to companies in danger of missing the start-dates for their projects, protect investment in the renewable heat industry, and help give certainty to thousands of people working in specialised UK supply chains.

"It is right that we offer certainty and breathing space to companies embracing renewable heat technology across the country," said Energy Minister Kwasi Kwarteng. "Renewable heat will play a key role in the UK's economic recovery as we redouble efforts to tackle carbon emissions. With Government support, these vital projects are on course to stop 108 million tonnes of CO2 from polluting the atmosphere, while also helping to create new green collar jobs."

In addition to extending the second allocation of tariff guarantees, the government today also confirmed a third allocation will open for new applications in July, in a bid to encourage more investment into the sector.

The next allocation round is set to be followed by a number of successor schemes designed to scale up the green heat sector, including a Clean Heat Grant scheme, Green Gas Support Scheme, and Green Heat Networks Fund. Consultations are currently running on the details of these schemes with a deadline for submissions of 7 July.

Caroline Bragg, head of policy at the Association for Decentralised Energy, hailed today's announcement as "really positive".

"The extensions provide much needed flexibility for low carbon heating projects battling the impact of the pandemic and showing clearly that the government is listening to industry's concerns," she said. "Decarbonising our heating is the next big challenge in meeting net zero. We look forward to working with government as they put forward their vision, strategy and investment to make real progress in this field ahead of COP26."

However, some industry insiders remain concerned about the government's broader heat decarbonisation strategy, with experts warning that as they stand the mooted plans are not ambitious enough.

Earlier this year, Richard Lowes at the University of Exeter warned that the government's projected deployment for green heat technologies remains far short of the levels required to put the country on track to meet its net zero emissions goals.

Richard Burrell, CEO of AMP Clean Energy, welcomed today's extension, but argued the government should take the opportunity to beef up its wider green heat plans.

"We are pleased with the extension to the tariff guarantee schemes which will ensure the delivery of a number of shovel ready, low carbon heat projects and support employment, thereby contributing to the green recovery," he said. "However, the Non-domestic RHI scheme will be closed to new applications in March 2021 and we would urge ministers to consider the further benefit that could be achieved through an extension through to 2022 and beyond but also to set out a substantial long-term framework to secure the investment required to change the way we heat our homes and businesses - an essential part of meeting net zero."

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• Topics
• Policy
• Infrastructure
• Renewable Heat Incentive
• green heat