Government Renewable Heat Incentive Announcement Described as “Misleading”

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07 July 2020 | Updated 09 July 2020

A ground source heat pump manufacturer is claiming that the government’s press release regarding the Non Domestic Renewable Heat Incentive is “damaging” and confusing.

The tariff extension to the Non Domestic Renewable Heat Incentive (RHI) was publicised on 30 June 2020, and Kensa Group say that the statement has brought market confusion and threatened the financial support for thousands of shovel ready low carbon schemes.

They argue that the announcement has been widely misreported as an extension to the Non Domestic RHI scheme (which remains due to close in March 2021).

However, the extension is only applicable to those in receipt of tariff guarantees, or to those that apply for a tariff guarantee and are able to provide evidence of Stage 2 Financial Close before March 2021, earning the applicant one extra year – until 31st March 2022 – in which to get the installation work completed. The deadline of March 2021 however remains for all other applicants to the Non Domestic RHI.

 

“Misinterpretation of the government’s announcement has understandably led to clients wrongly assuming the Non Domestic RHI has been extended, and thus taking the pressure off applications."

–David Broom

Sales Director, Kensa Contracting

“Widespread Confusion”

Described as a “boost for renewable heat projects as [the] government confirms tariff extension”, David Broom, Sales Director of Kensa Contracting, said that the press release has caused “widespread confusion” amongst Kensa’s clients.

“Misinterpretation of the government’s announcement has understandably led to clients wrongly assuming the Non Domestic RHI has been extended, and thus taking the pressure off applications. 

“The truth is the Non Domestic RHI has not been extended – the extension only applies to tariff guarantees, which will not be applicable to the majority of our clients due to tariff guarantees eligibility criteria for projects in excess of 100kW capacity; many social housing schemes will fall below this threshold.

“With the Non Domestic RHI on course to end in March 2021, the confusion surrounding the tariff guarantee extension could be significantly damaging to pipeline schemes in the renewables industry, which would otherwise bring immediate carbon savings, vital if we are to achieve our 2050 objectives. Any delay now could be financially and environmentally damaging.”

The Future Support for Low Carbon Heat

Presently there is a hiatus between the end of the Non Domestic RHI on 31 March 2021 and any future scheme of at least one year. In two recent consultations with industry, the Department for Business, Energy & Industrial Strategy (BEIS) has proposed a range of options for low carbon heat support beyond the Renewable Heat Incentive and it is seeking views on its proposals in a consultation that is due to close on 7 July 2020.

The Future Support for Low Carbon Heat, proposes a £2.2bn Green Gas Support Scheme (GGSS) and a £100m Clean Heat Grant to support the installation of Heat Pumps. Parallel to this, the government is seeking opinions on a series of reforms to the NDRHI scheme, prior to its closing in March 2021, “in order to deliver ongoing value for money to the taxpayer”.

Picture: A photograph showing a Social Housing scheme in Enfield, enabled by the Non Domestic RHI

Article written by Ella Tansley | Published 07 July 2020

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