Renewable Heat Incentive

Wednesday 14th December 2016 Written Statements

[The Minister for Climate Change and Industry (Mr Nick Hurd)]

Today my noble Friend the Minister of State for Energy and Intellectual Property has made the following statement:

In March 2016, the Government set out their proposals to reform the renewable heat incentive (RHI) scheme in the consultation “The Renewable Heat Incentive: A reformed and refocused scheme”. The consultation ran from 3 March to 27 April 2016 and received 370 responses from individuals, businesses, trade bodies and other organisations. I am pleased to announce that the Government response to the consultation has been published today.

Heat accounts for almost half of UK energy use and a third of UK carbon emissions. Decarbonising how we use heat in our homes, businesses and buildings is therefore an essential part of how we transition to a low-carbon economy. It can also in time help to make heating homes and other buildings more efficient and affordable.

In November 2015, the Government renewed their commitment to the transition to a low-carbon economy by confirming a continued budget for the RHI out to 2020-21. By confirming the available budget and setting out a number of reforms for how the scheme will operate, the Government intend to provide the level of certainty needed for consumers and industry to invest in renewable heating and for the market to transition towards being sustainable without Government support in future.

It is vital that the scheme delivers value for money for taxpayers and supports the development of technologies that will be important for the long term. That is why we will be reforming the scheme to ensure it:

Focuses on long-term decarbonisation: promoting the deployment of the right technologies for the right uses, while ensuring the RHI contributes to both our decarbonisation targets and to the UK's renewable energy target.

Offers better value for money and protects consumers: improving how costs are controlled, giving consumers more confidence in the performance of particular technologies and addressing potential loopholes in the scheme.

Supports supply chain growth and challenges the market to deliver: driving cost reductions and innovation to help build growing markets that provide quality to consumers and are sustainable without Government support in future.

[HCWS353]