The Renewable Heat Incentive has failed to meet its objectives or provide value for money, according to a government select committee report. The report by the Public Accounts Committee says: “The Department’s [BEIS] forecasts of take-up were wildly over-optimistic. Over nearly four years, only 60,000 renewable appliances were installed under the domestic RHI, compared to 6.2million gas boilers….
“The RHI simply does not work for households and businesses unable to pay the high upfront costs of renewable and low-carbon heating equipment – particularly as gas and oil boilers are cheaper and remain popular heating choices across the country.
The Association of Plumbing & Heating Contractors (APHC) agrees with the report’s findings. CEO John Thompson says: “The Renewable Heat Incentive was launched in April 2014 to encourage uptake of renewable heat technologies amongst householders, communities and businesses through financial incentives.
“In addition to the high capital outlay, the government failed to give the right amount of consideration as to the reasons why gas boilers are replaced; ie, when they break down or when the homeowner renovates their property. This has meant the government vastly over-estimated forecasts for the uptake of renewable and low-carbon technologies.
“As a result, the government has cut back its expectations of how much renewable heat will be produced by the scheme by almost two-thirds, and, of the reductions in carbon emissions due to the scheme, by almost half. Projected funding of the scheme has also been cut from £47 billion to £23 billion and now expects to install 111,000 heating systems as part of RHI rather than the original projected figure of 513,000.
“In order to meet their revised expectations, the purchase price of renewable technologies needs to be lower or the government needs to subsidise the initial capital outlay.
“Additionally, the over-burdensome nature of the installer accreditation scheme is limiting the uptake by the smaller plumbing and heating companies. Sadly, with the Each Home Counts proposals, it doesn’t appear that this is going to be addressed.
“The government needs to confirm what will follow when the current RHI funding ends on 31 March 2021, as our industry needs certainty in order to plan ahead.”