During this week’s spending review, the Chancellor announced plans to reform the Renewable Heat Incentive (RHI) and deliver a £700 million saving.
Despite this, Phil Hurley, Managing Director at NIBE, sees the outcome of the review as positive for the heat pump industry – hailing it as an opportunity to ignite future market growth.
Phil comments: “The spending review has provided all-important clarity on two points: firstly, that the RHI will continue for the remainder of this parliament, and secondly, that the budget for it will be a significant £1.15 billion. While there’s no denying that a £700 million reduction in support for the scheme is a substantial cutback, all is certainly not lost for renewable heat in the UK.
“At NIBE, we take the review as reassurance that the government not only believes in the capability of the scheme to drive widespread investment in renewable heat, but also remains committed to meeting its 2020 carbon reduction targets.
“Although we don’t know at this stage exactly what the reforms will look like, or how they will affect RHI tariffs for heat pumps, we’re optimistic that this injection of confidence will have a positive impact on market growth. For installers, it provides the necessary ammunition to continue communicating the benefits of the technologies – and the financial incentives that back them – to their customers. For consumers, it reinforces the message that renewables are here to stay and that now is the right time to invest. And for manufacturers and other industry stakeholders, it presents a fresh opportunity to work alongside policymakers to ensure that heat pumps and other renewable heating solutions remain an integral part of the UK’s future energy mix.
“As part of future reforms, at NIBE we would like to see the MCS process simplified and made more cost-effective. Removing some of the red tape around accreditation is the most effective way to make the renewables opportunity more attractive and accessible for installers – which is a vital ingredient to the successful rollout of renewable heat on a national scale.”