Government already looking at measures to contain costs despite low take-up

The government has met with stakeholders to discuss cost control mechanisms for its flagship Renewable Heat Incentive scheme, sparking concerns that ministers may alter it.

Last week, Building revealed that only 1% of the renewable heat capacity required to meet this year’s target under the scheme had been installed and accredited in the first threemonths of the programme.

But despite this low take-up, industry representatives say they have already met with the government twice to discuss measures to ensure the budget for the scheme does not overrun.

Industry figures told Building that news of the meetings so soon after the launch of the scheme could undermine confidence.

Building understands the government is anxious to avoid uptake spiralling out of control and putting a strain on the budget, as happened last year with the feed-in tariff (FIT) for solar power, when the government was forced to introduce rapid cuts to the tariff late last year.

Sustainability expert and consultant David Strong said: “[News of these meetings] won’t help confidence coming hard on the heels of what has happened on FITs. There’s a huge degree of nervousness in the microgeneration sector because a lot of the players had their fingers burned by that.”

Kate Ashworth, senior consultant at sustainability consultant Encraft, said: “Confidence is already quite low concerning the follow through with these schemes and any
news that they will be making adjustments will affect that.”

She added that the £860m of funding could be wiped out by a boom in installations.

Like the solar feed-in tariffs, the RHI offers payments to installers of heat pumps, biomass boilers, solar thermal systems and other renewable heat generators for every MWh of heat they produce.

The government expects an extra 57 million MWh of capacity to be installed by 2020.