Will RHI protect or damage the renewables market place?

Mitch Cooke set-up specialist environmental planning consultancy Environmental Perspectives in 2006 having previously led the environmental planning teams for WSP and WYG. In 2012, the company became Greengage Environmental LLP.

On the 11 June, Greg Barker, the Climate Minister issued a ministerial statement on the Renewable Heat Incentive (RHI) following a response to extensive consultation on the interim cost control measure. The RHI has been faced with repeated delays (with the domestic RHI now not expected to launch until Sumer 2013 – and not in October to coincide with the Green Deal) and changes, particularly in context of the debacle of the solar PV Feed-in Tariff.

On the one hand, the measure is practical and necessary – which includes a limit to the RHI at £70million in its first year (which will be frozen within a week’s notice, if it is likely that the annual budget may be breached). This would ensure that the 2013/2014 budget of £250m would remain intact and protected, and for further years, which will pay for existing installations and new installations in the future.

On the other hand, there is serious concern that the one week notice period is likely to damage the renewable marketplace. From experience, the specification of renewables (from planning and design to commissioning), particularly for new build projects, take much longer than a week. Furthermore, there is a danger this cost control measure will result in higher activities early on in the year, which will decrease towards to the end of the year, once the upper limits of the budget are met.

Whilst the ministerial statement does provide clarity and certainty that the RHI will be implemented, there are certainly some concerns that need to be addressed within the industry to ensure that this measure will not damage the marketplace. The government has stated that they will provide weekly information to update on forecasted expenditure of the RHI, and if required , an estimated date of suspension prior to the formal notice period – although they have also indicated that based on current uptake, this is unlikely. Whether this will be the case, remains to be seen. Furthermore, the question over the implementation of the RHI longer-term will also need to be addressed in more consultation… therefore, expect to see more changes in the near future!