Tens of millions of pounds of investment in low-carbon heating may have been lost due to the slow progress of Renewable Heat Incentive (RHI) applications, the Renewable Energy Association has claimed.
The trade body says the delays of up to a year and a half could be “crippling” to some businesses. Ofgem is understood to be working through a backlog of around 900 non-domestic applications.
“Our members obviously recognise the need for a thorough application process, but we are seeing delays of 18 months in some cases and that can be crippling to companies, both small and large,” said REA policy and external affairs director James Court.
“Potentially tens of millions have been lost in investment, not to mention good quality projects that the UK desperately needs if we have any hope of decarbonising our heat sector in particular.
“We have made representations to Ofgem and hope to see improvements, especially as we come to this critical stage with the Renewable Heat Incentive closing in 2021.”
A spokesperson for Ofgem told Utility Week: “We don’t treat applications as fraudulent, however given the RHI scheme is funded by the taxpayer, it is essential that we follow a robust process when carrying out reviews of applications. It is not uncommon for us to need to seek additional information from applicants if it is not clear from their initial submission.
“There has been a significant increase in RHI applications over the last six months. We are aware that industry have made representations on the length of application queue and its impact, we have listened to this and bought in additional resource to address this and the team has continued to increase the number of applications it processes.”
The RHI scheme in Northern Ireland was closed to new applicants in February 2016 following claims some recipients were gaming the system by deliberately wasting energy in what became known as the “cash for ash” scandal. The generous subsidies, which exceeded the fuel costs for some technologies, meant many were able to turn a profit by running their heating, no matter what for.
The UK version is set to close in March 2021.