Report backs OFTEC’s calls for RHI reform

OFTEC CEO Paul Rose says that renewable heating technologies are currently over 40% more expensive to run than a high efficiency oil boiler
OFTEC CEO Paul Rose says that renewable heating technologies are currently over 40% more expensive to run than a high efficiency oil boiler
OFTEC CEO Paul Rose says that renewable heating technologies are currently over 40% more expensive to run than a high efficiency oil boiler
OFTEC CEO Paul Rose says that renewable heating technologies are currently over 40% more expensive to run than a high efficiency oil boiler

OFTEC has re-ignited its calls for an overhaul of the domestic Renewable Heat Incentive (RHI) following a recent report from the National Audit Office (NAO) which confirms the scheme ‘has not achieved value for money’.

Published at the end of last month, the ‘Low-carbon heating of homes and businesses and the Renewable Heat Incentive’ report examines progress against the RHI’s key objectives and cost-effectiveness of the scheme, alongside monitoring, evaluation and non-compliance.

The findings validate OFTEC’s long held concerns that take up of the RHI has been ‘much lower than anticipated’ with the scheme delivering just 78,048 new installations in Great Britain (as at December 2017) at a cost of £1.4bn. NAO estimates that at this current rate, the RHI will achieve around 111,000 new installations by March 2021 – just 22% of the original 513,000 target.

The cost effectiveness of the RHI was also described as ‘uncertain’ and ‘likely to be worse than the Department’s estimate’. Furthermore, the report states that the Department for Business, Energy & Industrial Strategy (BEIS) has failed to keep track of sums paid out under the scheme, with overpayments to RHI participants in 2016-17 as a result of non-compliance with the regulations estimated to be as high as £3 million.

Commenting on the report findings, Paul Rose, OFTEC CEO said: “NAO’s study underlines the major concerns we have held about the RHI since its launch almost four years ago. Take up has remained poor and this is largely due to the high upfront cost of installing renewable heating technologies which is not addressed by the scheme.

“It’s encouraging that BEIS is consulting on the introduction of ‘assignment of rights’ to help tackle this issue, whereby a third party would pay the installation costs of the technology in return for the RHI payments.”