The Future of the RHI

I’m delighted to say that my worst fears for the RHI were not realised in the recent Government spending review. After the recent reduction in solar subsidies, I was concerned that austerity measures would mean the cancellation or reduction of the heat incentives. But the news is, by and large, good. In the week that leaders from 196 countries met in Paris for the UN Climate change summit to agree yet more stringent - and legally binding - targets for carbon emissions, the UK has announced that it will continue to support the RHI.

Moreover the Government has again formally recognised that the RHI schemes have an important contribution to make towards carbon and renewables targets. The budget to cover both schemes is confirmed out to March 2021, rising each year to a total of £1.15bn.

Change is, however in the wind (if you will pardon the pun). The RHI will be reformed to improve value for money and reduce both costs and the burden of cost control. Consultation on changes will happen during 2016 with the aim to implement changes in 2017. The recent document release from the Department of Energy and Climate Change warns of the need for “bold” decisions to be made ensure that the RHI is delivering,“the best results for the taxpayer, the climate, and for the future decarbonisation of heat.” The exact nature of the proposals for change of course remain to be seen, but with such a forceful wording, expect some pretty far-reaching reforms.

One of the key objectives of the reform is to look at ways of widening the appeal of the scheme by better supporting households that are less able to bear the up-front cost of installing renewable technology. This is very welcome and is a real challenge to overcome; and a point I will certainly be watching with interest during the consultation.