By Gemma Childe on 6th Dec 2011
Businesses have begun signing up for the long-awaited Renewable Heat Incentive, which it is hoped will lead the world in promoting the use of green energy.
The £860m fund offers payments to those with low-carbon heating systems installed since July 2009.
Biomass boilers are eligible for payments of up to 7.9p per kilowatt hour (kWh), solar thermal equipment 8.5p per kWh and heat pumps 4.5p per kWh on a quarterly basis for 20 years.
It is hoped that the scheme will result in 126,000 green heating systems being installed in the industrial, commercial and public sectors, cutting carbon emissions by 43 million tonnes and creating 500,000 renewable energy jobs.
The RHI finally opened to applications on November 28 after it was delayed due to EU aid rules. As a result, the payment for large biomass installations was cut from 2.7p per kWh to 1p per kWh.
The scheme is initially open to businesses only, although an interim programme providing discounts off renewable heat technologies for householders, the Renewable Heat Premium Payment, will run until March 31.
Greg Barker, the Energy and Climate Change Minister, said: “The RHI will usher in a new era in clean green heat technology. It’s a world first and has the potential to put the UK at the forefront of a vibrant new green technology sector.
“Renewable heat will be a big win for our economy – it will support thousands of green jobs, reduce our dependency on imported fossil fuels, reduce our carbon emissions and help us meet our renewable target.”
Gaynor Hartnell, the chief executive of the Renewable Energy Association, added: “This is excellent and very long-awaited news. We regard the heat incentive as one of its most significant goals in policy advocacy in our 10 years of existence, having led the campaign to get the powers included in the Energy Act 2008. It’s unique and will be watched by our European neighbours and further afield.”