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Renewable Heat Initiative back on track

Oct 26

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26/10/2011 13:52  RssIcon

But subsidy for large projects cut

The EU has now approved the government's £860m Renewable Heat Incentive (RHI) programme which is set to be launched at the end of November. But the final agreement with Brussels means support levels will have to be reduced for large biomass installations.

The scheme offers generators of renewable technologies a payment for the heat they generate. Initially, this payment will only be available to the non-domestic sector but households will be eligible for the tariff in Autumn 2012. Until then, households can apply for the Renewable Heat Premiuim, a one-off payment to to help them buy renewable heating technologies – solar thermal panels, heat pumps and biomass boilers.

For solar thermal products, any householder can apply but for heat pumps and for biomass boilers, only householders who are not connected to the gas grid can apply. More info from the DECC.

Negotiations with Brussels mean the tariff for biomass installations with over 1MW of capacity will fall from the 2.7p per kilowatt hour (kWh) agreed in March and approved by Parliament in July, to just 1p/kWh.

Paul Thompson, head of policy at trade body the Renewable Energy Association (REA), said the industry would be "relieved" the RHI was going ahead, but the reduction would be a shock to developers.

"People have gone ahead with projects based on the government plans set out in March and approved in July. These things always say 'subject to EU state approval;, but you generally trust the discussions have already been had with the right people in the Commission. This is a big hit for anyone doing projects at a large scale."

See our buyers' guides to the renewable technologies eligible for the scheme: Biomass boilers, Solar Thermal, Ground Source Heat Pumps.

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