Government has dropped plans to remove solar thermal from the Renewable Heat Incentive (RHI) scheme and the technology will receive the same level of support (19.74p/kWh) over seven years. Applications for solar thermal in industry up to 200kW in size will also continue to be supported.
Tariff reductions are also less drastic than previous proposals which included reductions of tariffs by up to 45 per cent for parts of the biomass sector. Tariffs for new air source heat pumps and ground source heat pumps increasing to 10.0 pence per kilowatt-hour (p/kWh) and 19.55p/kWh respectively.
An introduction of tariff guarantees for large biomass boilers; large biogas plant; ground source heat pumps; and all capacities of biomethane; biomass-CHP and deep geothermal plant are also part of the finalised scheme.
The tariff for new biomass installations will also be increased to 6.44p/kWh – the level available between October and December 2015, adjusted for inflation.
Reforms are expected to come into force in spring 2017 and follow a consultation launched in March this year and the finalised scheme will “move us closer to the UK meeting its legally binding 2020 renewable heat target”, according to the Renewable Energy Association (REA).
REA chief executive Nina Skorupska said: “The reforms made today to the Renewable Heat Incentive are an improvement to the earlier consultation and will go some way to grow an effective renewable heat sector in some cases to 2021. Renewable gas, biomass boilers, solar thermal, heat pumps, heat networks, hydrogen and other technologies will all have a role to play.
“The next step is for government to lay out a long-term energy strategy so industry can prepare for low-carbon heat deployment in the 2020’s and 2030’s. As of now, this policy only takes us to 2021 and there is little indication of the Government’s vision beyond.”
The Solar Trade Association welcomed the new plans for the scheme and the Anaerobic Digestion and and Bioresources Association chief executive Charlotte Morton said it was “great to see that the new ministers in the Department for Business, Energy and Industrial Strategy remain committed to decarbonising heat in the UK.”
“We are pleased to see that tariff levels have been reset – this should support higher levels of deployment,” she added.
The number of installations under the Domestic Renewable Heat Incentive (RHI) reached 50,000 in July this year, meaning a total of 827,000MWh of renewable heat was being generated, saving an estimated 3.4 million tonnes of carbon dioxide over its 20-year operating period.