Dramatic cuts to the Renewable Heat Incentive (RHI) scheme announced yesterday could stop the new sector “in its tracks”.
That’s according to renewable heat installers Ardenham Energy, which has lashed out at the Government for planning a cap on spending.
Yesterday DECC said it will limit RHI payments to £70 million for 2012-13 and will suspend the subsidy if it forecasts this budget will be exceeded. This will be triggered if 97% of the budget is used up.
Neil Lawson, head of renewable heat at Ardenham Energy said: “These proposals will stop the development of a specialist renewable heating sector in its tracks. The only way that businesses will be able to survive a peremptory suspension of the RHI will be to ensure that RHI-based work is only ever a minority of their work stream.”
DECC told ELN the lower £70m budget was “ample”. A spokesperson said: “[The cap] is a precautionary measure as it’s nowhere near breaching the RHI budget… We’ve looked at the modelling and think it’s an ample budget to support the RHI.”
Mr Lawson is also concerned firms like his will be given just a week’s notice of the suspension.
He added: “When the upper limit is hit and DECC’s bullet blows the plans apart, what happens to the hapless installer who told the client that they would benefit from the RHI? What happens to the client? Do they decide not to turn their heating on until the next financial year and commission it then?”
DECC said the week’s notice period, triggered when 97% of the budget has been used, was better than having a month’s notice at a higher threshold.