£860m on table for Renewable Heat Incentive

18 March 2011

The government has announced details of its £860 m Renewable Heat Incentive scheme, Construction News reported.

The scheme will offer financial incentives to companies and private individuals for installing technologies including biomass boilers, heat pumps and solar thermal panels, Building reported. The grants are expected to stimulate £4.5 bn of green capital investment.

Owners of eligible installations will receive a cash payment for each kilowatt hour of heat generated. Grants are likely to amount to £300 towards the cost of a solar thermal installation, £950 for a biomass boiler and £1 250 for ground source heat pumps.

The scheme will be introduced in two phases with the first phase, which will take effect from the middle of next year, targeted at non-domestic, commercial-scale users with high heat demand.

The second phase, taking effect from October 2012 to coincide with the introduction of the Green Deal, will see grants awarded on the basis of calculations from heat meters.

Major clients welcomed the incentive scheme, Construction News reported. Land Securities head of sustainability and engineering Neil Pennell said: “The industry needs to deliver on carbon reduction but it needs to be done in an economic way and the right thing to do is to introduce support for renewable heat so it provides an incentive for greater take-up of the technology.”

Land Securities and Geothermal International have already installed a major renewable heating system at the One New Change shopping centre in the City of London.

Pennell welcomed the fact that the incentive scheme would reduce its capital expenditure on the site, and said Land Securities would consider installing further renewable heating systems as a result of the announcement.

Geothermal International operations director Karl Drage said: “The RHI scheme is one of the drivers that will now tip the balance in favour of firms choosing renewable technologies,” he said.

But the announcements were met with criticism that the different minimum energy efficiency standards will be applied to commercial buildings and homes, and that air-source heat pumps will not be included in the first phase.

Neil Schofield, head of government and external affairs at boiler manufacturer Worcester, said: “There are a number of questions yet to be answered for the domestic sector, which leaves the picture confused.” 

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