On the 17th day of December (2015) the Government gave to me – reduced support for solar PV.
On the 14th day of December (2016) the Government gave to me – a thumbs up for large heat energy.
After last year's disappointing Christmas present, thankfully it seems the Government is doing a better job of embracing the festive spirit this year. Although it will not be all smiles when this gift is unwrapped, the reaction will certainly be better than the one from solar PV developers last Christmas.
It is pleasing to see that support for solar thermal has been maintained and the tariffs for larger installations of other technologies such as biomass and AD will even be raised. The uplift in tariffs does of course raise the risk of the Government shutting down the RHI scheme to new applicants sooner than anticipated. However, on a more positive note, this consultation response does demonstrate that the Government recognises the importance of decarbonising heat, which is vital if the UK is ever to reach its climate change reduction targets.
This is an ambitious set of changes for the renewable heat sector to digest. Particular winners are solar thermal, domestic heat pumps and AD. Biomass has fared reasonably well considering the proposals and rhetoric put forward in the consultation, with an increase in the domestic tariff and higher than anticipated non-domestic tariff. The tariff guarantee and tariff reduction changes could have a big impact on the delivery of the scheme and the budget expenditure up to April 2021. This consultation response represents one of our first indications of how BEIS is approaching the sector. On this basis, the process has proved open and responsive to the views of industry. How the RHI will dovetail with a wider strategy on heat and decarbonisation, only time will tell.