The government has confirmed new reforms for the Renewable Heat Incentive (RHI) scheme.
The announcement follows a consultation in March, which was criticised by the sector as BEIS proposed tariff reductions of 45% for parts of the biomass heat sector. It was believed that could lead to a 98% drop in installations.
Under the new plans, the government has decided not to remove solar thermal from the RHI scheme. The technology will receive the same level of support at 19.74p/kWh for the next seven years.
Solar thermal projects with a capacity of up to 200kW will also continue to be supported, it adds.
BEIS has also announced tariffs for new air source heat pumps (ASHPs) and ground source heat pumps (GSHPs) will increase to 10.02 p/kWh and 19.55p/kWh respectively.
The tariff for new biomass installations will rise to 6.44p/kWh – the level available between October and December 2015.
The government will also introduce heat demand limits to cap the level of annual consumption in respect of which any household can receive support.
They are set at 20,000kWh for ASHPs, 25,000kWh for biomass boilers and stoves and 30,000kWh for GSHPs.
The Renewable Energy Association (REA) believes the new plans indicate the reformed RHI “moves the industry closer to the UK meeting its legally binding 2020 renewable heat target”.
CEO Nina Skorupska said: “The reforms made today to the Renewable Heat Incentive are an improvement to the earlier consultation and will go some way to grow an effective renewable heat sector in some cases to 2021. As recognised in this consultation response, heat is a very complex issue and we need all technologies on board to achieve our longterm goals. Renewable gas, biomass boilers, solar thermal, heat pumps, heat networks, hydrogen and other technologies will all have a role to play.
“The next step is for government to lay out a long term energy strategy so industry can prepare for low carbon heat deployment in the 2020s and 2030s. As of now, this policy only takes us to 2021 and there is little indication of the government’s vision beyond.”