Government announces policy "to revolutionise how heat is generated and used in buildings"

The Government has announced details of the £860m Renewable Heat Incentive policy to revolutionise the way heat is generated and used in buildings and homes. It's remarkable for a number of reasons:

- Like the Feed-In Tariff, the RHI takes a long-term approach to incentivising installation of renewable heat (from biomass, solar thermal, ground and water source heat-pumps, on-site biogas, deep geothermal, energy from waste and biomethane)

- It’s the first of its kind in the world (i.e. there has never been a separate guideline for renewable heat): it’s a significant move, as around half of the UK’s current carbon emissions come from the energy used to produce heat – more than from generating electricity. In fact over 95% of heat in the UK is currently produced by burning fossil fuel.

- There is one scheme for industry/commercial/public sector and one for the domestic sector: Targets include the expansion of renewable heat in the industrial/commercial 7-fold by 2020. This scheme also gives the opportunities for schools, libraries, community centres and communities of households to install renewable heat.

- A full system of RHI payments will be available to households from October 2012; and the Government says that in the interim, more than a quarter of the first year’s budget will be guaranteed for up to 25,000 household installations through a “RHI Premium Payment” to encourage take-up. Those who sign up to a premium payment must prove

- It will be particularly useful for rural areas because these technologies are often particularly appropriate for areas where there is low density of housing which is not necessarily near mains electricity or gas.

- The initial investment by government is £860m, which is expected to increase green capital investment by £4.5 billion up to 2020. The Government says this will create a large and thriving market in renewable heat

The Department for Energy and Climate Change will seek Parliamentary approval of the regulations in July 2011 and will introduce the tariff scheme after that.

Reactions

We will track further reactions over the coming days, but the main initial criticism is that the scheme excludes air source heat pumps, one technology which is used to produce renewable heat.

YouGen’s Cathy Debenham blogs about the domestic side here:

For first reactions on Twitter follow #rhi