Future support for low carbon heat

The UK Government published it’s 2020 Budget on Wednesday 11th March with the Chancellor Rishi Sunak providing a boost to renewable technologies with the extension of The Domestic Renewable Heat Incentive. In addition, funding has been allocated to support the design and delivery of net-zero policies and programmes.

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Future support for low carbon heat consultation from BEIS

The Department for Business, Energy & Industrial Strategy (BEIS) is now seeking views on options for the future support for low carbon heat, beyond the Renewable Heat Incentive (RHI).

Future Support

Decarbonisation of heat is one of the key challenges for government as the heating of homes, businesses and industry is responsible for a third of the UK’s greenhouse gas emissions. As mentioned in the Budget announcement, the consultation on future support for low carbon heat sets out proposals on a number of decarbonisation measures, including:

  • a Green Gas Support Scheme: increasing the proportion of green gas in the grid through support for biomethane injection
  • a Clean Heat Grant: support for heat pumps and in certain circumstances biomass, through an upfront capital grant to help address the barrier of upfront cost
  • budget control and financial management of the spending proposals for green gas and buildings technologies
  • participant compliance

The government is aiming to publish a Heat and Buildings Strategy later this year, which will set out the immediate actions they will take for reducing emissions from buildings. These include the deployment of energy efficiency measures and low carbon heating as part of an ambitious programme of work required to enable key strategic decisions on how to achieve the mass transition to low carbon heat.

Clean Heat Grant

Support through the Clean Heat Grant will be targeted at households and small non-domestic buildings, to enable the installation of heat pumps and, in limited circumstances, biomass, to provide space and water heating. This support will help grow confidence in these low carbon technologies and supply chains. To help address the barrier of upfront costs faced by many consumers, government proposes to provide this support through capital grants – paid for through exchequer funding – rather than the tariff system used under the RHI. It is proposed that Ofgem will administer the scheme.

The consultation set out proposals and welcome views on the following:

  • Delivering support through an upfront grant scheme.
  • A voucher system for grant delivery, designed to target the upfront cost barrier.
  • Supporting domestic and non-domestic installations up to a capacity of 45kW.
  • Providing a flat-rate grant across different technology types.
  • A recommended support level of £4,000.
  • The criteria for ensuring biomass is only installed in properties deemed not suitable for a heat pump.

BEIS is working with the devolved administrations with the intention of implementing scheme proposals across Great Britain.

Future support consultation now open

This consultation is now open through until 11:45pm on 7 July 2020 and can be completed online here.

RHI Extension

The Budget 2020 also saw the extension of the domestic Renewable Heat Incentive for an additional year (31 March 2022). BEIS has now announced further details on this extension and they can be viewed here.

Non Domestic RHI Consultation

Government is also seeking views on the closure of the non-domestic Renewable Heat Incentive (NDRHI) scheme to new applicants, and how to future-proof the scheme for the remainder of the payment period.

The proposed reforms aim to ensure the scheme continues to:

  • offer ongoing value for money to the taxpayer
  • improve the experience of participants
  • maximise the contribution the NDRHI makes to the decarbonisation of heating in the UK

This consultation closes at . Click here to contribute to the consultation.

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