Critics pick holes in the Renewable Heat Incentive

Aiding fuel poverty with the Renewable Heat Incentive (RHI) was a key topic of discussion at the House of Commons last week, with critics highlighting inconsistencies in the scheme.

In the Energy and Climate Change conference on Thursday (10 February),UK Secretary of State, Chris Huhne, said: “If we get to the roots of fuel poverty, which is often not low income per se, but people relying immensely on energy because they have poorly insulated homes, we can tackle the problem at its core, rather than merely stick on plasters.” This is a key part of the green deal, he said.

Nadhim Zahawi MP, Stratford-on-Avon, agreed that the RHI is one way to deal with such problems.

However, he said it appears that even early adopters of ground-source heat pumps and other renewable sources will not be able to access the RHI as they will not have installed their equipment before the incentive launches in June 2011.

Zahawi said that the uncertainty is confusing to his constituents and is affecting the renewable energy industry.

“Obviously, we are trying to eliminate uncertainty as rapidly as we can and trying to be as clear as possible about the policy framework,” said Huhne.

But the problem appears to mirror that felt towards the feed-in-tarriff (FIT) in 2009. Ninety-seven MPs signed an Early Day Motion calling for pre-July 2009 early adopters of renewable energy technologies to be rewarded equally for their hard work and innovation.

The then Conservative opposition committed, in writing, to reviewing Government policy in this area and 80 per cent of Liberal Democrat MPs, including leading members who are now in Government, backed the campaign. Government conclusion meant that early adopters of renewables were unable to benefit from the FIT incentive.

Juliet Davenport, Chief Executive of Good Energy, said in September 2010: “Now we know the Government isn't going to do anything on the feed-in tariff for the early adopters, we need a prompt decision about the RHI. In view of the Government’s decision, early adopters of renewable heat will likely be deterred from any new investment in case they get the same treatment.”

Last week, Huhne announced that the government is to launch a comprehensive review of the FIT scheme in the light of concerns that large-scale, 'industrial' solar farms will suck up the majority of the available subsidy intended for small-scale installations. Further discussions regarding the RHI and FIT review are pending.

The Association for the Conservation of Energy (ACE) also commented on the RHI scheme, emphasizing the importance of insulation in homes, so that less energy is needed.

Commenting on the Department of Energy and Climate Change consultation in April, 2010, the ACE stated that the “Government must also require that properties requiring more expensive insulation measures like solid wall insulation are insulated if beneficiaries are to receive the RHI payment, since these properties should receive insulation over the coming years as part of Governments HEM (Household Energy Management) strategy.”

To assist these households to afford the insulation, ACE suggests the RHI payment be based on the heating requirement without insulation, but that the system installed is appropriately sized based upon an insulated property.

“This will give these households a greater ROI (return on investment) and a lower upfront capital cost, both which can be used to cover the cost of the insulation. Households that fail to implement this within two years should have their RHI payment revoked,” said ACE.

Good Energy states: “Microgeneration has a key role to play in helping the UK reach a 100 per cent renewable future by 2050, and we hope the Government will do more to encourage and aid – rather than obstruct – our community of homegrown energy pioneers.”

Image: Edmund Tse | Climate Action