The Renewable Heat Incentive (RHI) is due to start in April 2011, following the Feed-In Tariffs for renewable electricity (FITs) introduction in April 2010 both as part of the Clean Energy Cashback scheme. The RHI is a Government payment scheme to be supplied to those who generate renewable heat through micro-generation technology within their property. The tariff level itself will depend on your choice of renewable system and its output, but it could be up to 18p/kWhr (http://www.rhincentive.co.uk/).

A recent discussion between the Energy Minister Greg Barker and MP Michael Fallon highlighted that the Government are aware of the pressing need within the industry for up to date information on the status of the RHI. He stated that the proposals of the RHI are being reviewed, and commented, “the Government are committed to increasing the amount of renewable heat in the UK; this is a crucial part of ensuring we meet our renewables targets”.

Ref: http://services. parliament.uk/hansard/Commons/bydate/20100628/writtenanswers/part003.html

A prompt decision from Government will be crucial for the micro-generation industry as the UK target of 15% renewable energy by 2020 will require healthy investments into the industry. The plans for RHI were supported across the board by UK political parties for their benefits towards the 2020 targets. The Tories policy paper released earlier this year entitled ‘Rebuilding Security’ showed great support of a feed in tariff to support renewable heat sources. Graham Meeks, the Combined Heat and Power Association director feels “the Conservative’s specific commitment to use a feed-in tariff to promote the capture of waste heat could have a transformational effect for CHP and is very welcome.” Similarly the Liberal Democrats also pledged to continue with Labours FITs and RHI with suggestions of a possibility for a higher feed in tariff than Labour’s.

Talking on the BBC Radio 4 Today show Lord Turner of the Climate Change Committee (CCC) believes there is “underlying progress” in emission reduction. He argues that we should, and we are beginning to, drive through Government policies on renewable energy. Further he states that there is a role for the new Government in recharging for renewables and subsidising in the short term will be beneficial.

Germany is currently the model policy with their now well established feed in tariffs as their “total installed solar capacity is around 200 times that of the UK” (The Guardian). In the Netherlands decentralised energy covers 40% of the total electricity demand. Thus examples from Europe show that productive feed in tariffs and incentives have produced a 43% rise in the second quarter of 2009/10 (Cleantech Group and Deloitte report – The Guardian).

To conclude, the new government was and remains committed to the Renewable Heat Incentive. It will be too expensive in the medium to long term not to stimulate the micro-renewables market.