The Renewable Heat Incentive (“RHI”), is a traiif paid directly from Government (OFGEM) to any who installs a renewable heat technology such as ground source heat pumps and air source heat pumps.
Up until now, the RHI was due to end in 2021. The recent budget has extended this to March 2022.
Interestingly they also signalled some new significant policy directions:
- Low carbon heating support scheme
- Tax on gas
Low Carbon Heating Support
While the RHI is extended the UK Government have indicated they are looking at a replacement scheme – most likely a direct grant for the upfront cost of installing a heat pump. Lots of detail to work out but still good news as it recognises the important role in renewable heat in the countries path to net zero.
Tax on Gas
Up to now there has been no added tax on gas – unlike electricity which had the Climate Change Levy. Now the treasury has announced they will introduce a “Green Gas Levy” on energy suppliers who supply gas. As with all levies, the costs will be passed down to gas bills. A small shift but significant in that the external carbon and air pollution costs of gas are finally being recognised in the tax system.