The Budget 2020

The Domestic Renewable Heat Incentive to be extended and much more from the 2020 Budget

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.

Key Announcements

The Budget saw some key announcements, including:

  • £1bn on green transport.
  • An £800m fund to develop at least two carbon capture projects.
  • A £270m green heat network fund.
  • A £100m grant for homes to adopt low-carbon heating.
  • A rising levy on gas use through the Green Gas Levy and the Climate Change Levy.
  • A freeze on fuel duty, and scrapping tax relief on red diesel by 2022.
  • A £200-a-tonne tax on plastic packaging with less than 30% recycled content for companies that use more than 10 tonnes a year.

In his first budget, the Chancellor announced that it will extend the Renewable Heat Incentive (RHI) for an extra year, until 31 March 2022.The government will also introduce a new allocation of flexible tariff guarantees to the Non-Domestic RHI in Great Britain in March 2021, helping to “provide investment certainty for the larger and more cost-effective renewable heat projects,”

A new low carbon heat support scheme

Also included in the budget was mention of consultation on introducing a new low carbon heat support scheme from April 2022, a possible scheme to follow on from the RHI. This will help households and small businesses invest in biomass boilers and heat pumps. This is backed by £100 million of new Exchequer funding.

The government will invest a further £270m in a new green heat networks scheme, enabling new and existing heat networks to be low carbon and connect to waste heat that would otherwise be released into the atmosphere.

Levy on gas suppliers

Additionally, government aims to introduce a levy on gas suppliers to support green gas injection to the grid. This will accelerate the decarbonisation of the UK’s gas supply by increasing the proportion of biomethane in the grid, with an implementation date in late 2021.

HETAS CEO Bruce Allen commenting on the announcement:

“It is pleasing to see the government is extending support for the Renewable Heat Incentive and looking at additional funding to enable homeowners to heat their homes with low-carbon alternatives. HETAS has long supported the RHI and the uptake of biomass heating and additional funding from 2022 is a positive step for those choosing biomass heating.”

HETAS operates a competent persons scheme for biomass installers as well as offering MCS biomass schemes for installers and products. To find out more about our biomass registration follow the links below.

The Budget and Coronavirus

The Chancellor pledged to do whatever it takes to support the economy through the disruption caused by COVID-19 with a £12 billion package of targeted measures. It included a £5 billion emergency response fund to support the NHS and other public services, £40 million of new funding for rapid research into COVID-19 and a commitment of up to £150 million to the International Monetary Fund’s Catastrophe Containment and Relief Trust.

To support people affected, the Chancellor announced the government would be extending Statutory Sick Pay (SSP) for all those who are advised to self-isolate and their carers – even if they haven’t yet presented with symptoms. Statutory Sick Pay costs for businesses with fewer than 250 employees will be met by the government in full for up to 14 days.

Rishi Sunak also set out plans to support the self-employed, those earning below the Lower Earnings Limit of £118 per week and a new £500 million Hardship Fund to directly support vulnerable people. The government will also increase the Business Rates retail discount to 100% for one year and expand it to the leisure and hospitality sectors.

Please refer to official government channels for updates on this subject.

Further Information

Click here to get in touch with the HETAS team.

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