Question

To ask the Secretary of State for Energy and Climate Change, what forecast her Department has made of the level of potential underspend on the (a) domestic and (b) non-domestic Renewable Heat Incentive in 2015-16.

The Renewable Heat Incentive (RHI) does not operate under separate budgets for the domestic and non-domestic schemes. For 2015/16 it has a single budget limit of £430m for both schemes combined. This is a spending limit, not a central forecast; and the scheme is not deemed to have ‘underspent’ if expenditure is below that limit. The central spend forecast for 2015/16 that was set out at the time the £430m budget limit was agreed (as part of the 2013 Spending Round) was £365m.

DECC does not regularly publish forecast expenditure for financial years; instead publishing monthly data on ‘committed expenditure’ – the estimated costs of supporting all plants applied to the scheme for a rolling 12-month cycle.

However, as part of the 2015 Comprehensive Spending Review, the Office of Budget Responsibility (OBR) have published a forecast of £420m for 15/16:

http://budgetresponsibility.org.uk/supplementary-forecast-information/.

This is still subject to considerable uncertainty, as the scheme is largely paid on metered heat; and so final expenditure will be determined by the level of heat generation this winter, as well as rates of new applications.