March saw the launch of the Renewable Heat Incentive (RHI), a scheme designed to support emerging technologies and businesses in the UK by rewarding those who reduce their dependence on fossil fuel powered heating systems. The £860m government scheme is expected to create a new market in renewable heat by stimulating an expected increase in green capital investment by £4.5 billion up to 2020.
The first phase of the RHI will focus on large-scale systems suitable for municipal and commercial buildings. It isn’t yet clear exactly when the first payments will be made, or how they will be administered, but the government has promised all technologies installed since July 2009 will be eligible for future payments.
The domestic version of the RHI won’t launch in full until October 2012, to coincide with the Green Deal, a government policy supporting energy efficiency in homes. In the meantime, £15 million will be made available in grants – called Renewable Heat Premium Payments – to subsidise the cost of installing a domestic-scale renewable heating system. The government aims to announce details of these grants in May 2011 and make them available from July 2011.
Half of the UK’s carbon emissions come from the energy that produces heat; and fossil fuels currently produce 95% of heat in the UK. It is hoped that the new scheme will encourage the installation of equipment such as heat pumps, biomass boilers and solar thermal panels to reduce emissions and support the existing 150,000 jobs in the heating industry.
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