LONDON, UNITED KINGDOM -- (Marketwire) -- 09/21/10 -- The Renewable Heat Incentive (RHI) is just six months away, but as the introduction date beckons there is still no clear understanding of whether the scheme will go ahead in its current form with more criticism being aimed in its direction from the Renewable Energy Forum (REF). Solar Power Grants, the comprehensive guide to incentives available for installing solar technology into your home, says it's vital for the government to make a decision on the scheme now for the benefit of heating industry.
The Renewable Energy Forum has released the report 'The Renewable Heat Incentive: Risks and Remedies' which proposes the coalition government needs to make significant changes to the incentive or scrap the scheme altogether. The group has warned the technologies eligible for the tariff scheme are 'not quite ready' and haven't been tested in this country and have deemed the incentive as 'an expensive leap into the dark'.
Using the Department of Energy & Climate Change's own charts and figures, the forum calculated a number of costs that would have a negative impact on consumers.
Using the government's own calculations, the costs of the Renewable Heat Incentive exceed the energy benefits by a wide margin, ranging from GBP 1.2bn to GBP 13.4bn.
The forum also claims, using the government's estimates, the Renewable Heat Incentive would increase the average domestic gas bill by 14 per cent (GBP 94) per annum by 2020, pushing more people into fuel poverty, and the average medium sized commercial gas bill by 19 per cent (GBP 86,000) by 2020.
The resulting carbon emissions reduction by 2020 through the Renewable Heat Incentive would see just a minor drop of three per cent according to the Renewable Energy Forum's calculations and funding the incentive could consume around two per cent of the annual income of the poorest households - funds that will go directly towards reducing the bills of the richest households, who are able to benefit from the RHI subsidies.
The report said: 'The funding mechanism for the RHI is as yet undetermined. The options are either a levy on fossil fuel sold for heat, or a direct draw from general taxation.
'A levy on fossil fuel would fall on all users of fossil fuels for heat, including off-grid gas and oil consumers. This would almost certainly mean that a significant proportion of poorer members of society would bear a disproportionate share of the costs, and is very likely to increase fuel poverty in certain sectors, particularly rural areas. DECC's own analysis suggests that government is aware of this.'
David Holmes, the founder of Solar Power Grants, said the Renewable Heat Incentive debate has gone on too long and speculation needs to be brought to an end now. However, this can only be done by the government.
'The entire home heating industry is sat on the edge of its seat waiting for a final verdict on the future of the Renewable Heat Incentive,' he said.
'Some very large companies have decided to offer microgeneration packages to consumers to run alongside this incentive, such as solar thermal water heating panel packages. If changes are made to the Renewable Heat Incentive then everyone in the heating industry needs to know now, because at this time a lot of people are planning for 2011 without any signal of what the future holds for home heating.
'If the Feed-in Tariff for renewable electricity is anything to go by, it shows that a tariff scheme will be an incentive for consumers to switch to renewables. However, until a structure of how the Renewable Heat Incentive will be funded is clarified, it is a complete guessing game.
'The government needs to react now to clearly state the future of the incentive, before more companies commit to an unsecure and uncertain future.'
For more information on the Renewable Heat Incentive, please visit www.solarpowergrants.co.uk.
Solar Power Grants