The government should undertake a review of the under fire Renewable Heat Incentive (RHI) scheme by the end of this year, according to a new Energy UK report.
The industry umbrella body has called on the government to review its suite of low carbon heat initiatives, including the RHI and the Heat Network Innovation Project, which are due to close in the early 2020s.
Energy UK says investors require clarity about the long-term framework for funding lower carbon heating solutions.
It urges the government to widen the range of low carbon heat technologies that it supports, expand the scope for private investment and encourage mass adoption of heating installations by targeting property developers and housing associations.
The RHI was the subject of a critical report by the National Audit Office last month, which raised concerns over lower than anticipated take-up of the initiative and the way payments had been monitored.
The Energy UK report also calls on the government to reintroduce its target to make all new housing zero-carbon.
And it recommends revamping the regulatory framework for heat and for the government to set out a plan for deploying low carbon heating solutions in properties most suitable for adaptation, such as the 15-20 per cent of UK households off the gas grid.
The Energy UK report highlights the Committee for Climate Change’s statement that meeting the 2050 emissions reduction target may be impossible unless the emissions produced by heating are nearly eliminated.
It says: “Urgent action is needed to lay the groundwork for a regulatory and policy framework that can support the decarbonisation of heat over the next two decades.”
Lawrence Slade, chief executive of Energy UK, said:“If, as the government’s Clean Growth Strategy sets out, the 2020s will see real change taking place in heating, then we need to prepare the ground now.”
Kevin Stickney, managing director of ground-source heat provider Erda Energy, said: “Energy UK is absolutely right in saying the time for action is now. There are big challenges in decarbonising heat, but we can’t let them paralyse us.
“We need to start making decisions on the big questions now – such as hydrogen versus electrification – or we’ll find it’s too late.”
Energy UK will be publishing a follow up paper on the future of decarbonised heat later in 2018 based on industry opinions about the longer-term strategic decisions required to achieve this goal.