A 10 month gap before the Renewable Heat Incentive is introduced could stifle the renewables economy
The Solar Trade Association (STA) have expressed dismay that funds in the Low Carbon Building Programme (LCBP) programme (Phases 1 and 2) are set to expire within the next 2 months, a full 10 months ahead of the introduction of the Renewable Heat Incentive (RHI), which could lead to job losses and bankruptcies within the renewable heat industry.
Currently, the Low Carbon Building Programme Parts 1 and 2 provides grants to householders and public sector buildings to encourage the uptake and installation of renewable heat technologies including Solar Thermal technologies. Originally, the schemes were due to expire in Spring 2011.
Over the last 2 years renewable technologies have witnessed phenomenal growth and the renewable heat industry can be considered a true economic success story through the current recession. This has been largely due to the previous commitment of Government to support and nurture it. However, in light of the funding cull due to happen, the clear funding gap that will emerge will stifle the renewable heat industry as homeowners and public sector buildings are no longer able to consider these technologies as a viable option economically. The impact on jobs and the overall UK economy can only be negative, with job losses and destruction of an industry that needs to be gearing up for the introduction of the RHI. Stifling green shoot growth at this stage is also likely to have a long-term impact so that the uptake of renewable heat technologies will effectively stall, to the detriment of the RHI scheme for 2011 and beyond.
The use of renewable heat technologies in the public sector, especially housing associations, has been an essential focus in the battle against fuel poverty. Providers of Solar Thermal systems have been pivotal in countering this poverty for housing associations such as Islington Borough Council. They have installed Solar Thermal systems in more than 100 of their homes generating in excess of 75,000 kWh of heat with a CO2 saving of at least 47,000kg per year.
The STA are calling for Government to allocate a further £10 million to plug the funding gap and ensure a smooth transition to the RHI next year. The STA in partnership with the Renewable Energy Association, The Heating and Hot Water Industry Council, the Heat Pump Association, Ground Source Heat Pump Association and the British Electrotechnical and Allied Manufacturers Association urge the Chancellor to reconsider the cull of the LCBP.
Howard Johns, Chair of the STA said “DECC are leading the way globally with the renewable heat incentive, and we are all very impressed by their resolve to deliver this important mechanism. However the current funding gap severely undermines the industry’s ability to deliver on the RHI when it arrives. We are now faced with ten months of shut down before the new funding stream becomes available. It seems unbelievable that £10M cannot be found to keep the industry growing over the coming year.”
Background information on the Low Carbon Buildings Programme Phase 1 and 2
Both Low Carbon Buildings Programme phases provide grants to encourage homeowners and public sector buildings to install renewable heat technologies (solar thermal hot water, ground source heat pumps, air source heat pumps and wood fuelled heating). Phase 1 is aimed at householders and was due to be open for applications until late 2010; under this scheme householders could claim up to a maximum of £2,500. Phase 2 is aimed at the Public Sector (housing associations, schools, hospitals and local authorities), and final grant applications were expected by the end of February 2011. Organisations were able to apply for up to 50% of the cost of installing approved technologies, up to a maximum of £200,000.
For both schemes the plan was that they would end on the 1st April 2011 when the Renewable Heat Incentive will be introduced.
Information Updated on: 1 February 2012