Confidence needs renewing

17 October 2011

PLUMB Center says it is vital for the government to restore confidence to the renewables industry in the wake of the surprise suspension of the £860m Renewable Heat Incentive (RHI) scheme.

The first phase of RHI, which will provide subsidies to the non-domestic market, was put on hold on September 30th 2011 because of European Commission concerns that the large biomass tariff of 2.7p per kilowatt hour had been set too high.

The government had set a tariff level to achieve a 12 per cent annual rate of return for installing renewable heat technology.

A statement on the Department of Energy & Climate Change website stresses that the government is committed to the scheme and ministers have suggested that it should be launched in November.

Simon Allan, Plumb Center’s Director of Renewables, said: “It is very disappointing. The industry needs a public statement from government making it clear that RHI will go ahead very soon. We hope everything is ironed out by November.”

“The effect on confidence within the market is critical. Installers are investing a lot of time and money getting the correct MCS accreditation, so they have to be sure the prize isn’t going to be whisked away at the last moment and companies manufacturing these products need to be sure the market isn’t going to disappear.”