Heat Pump Association has expressed its concern following the DECC's announcement about funding and cost control for the current (2012/13) Non Domestic RHI (Renewable Heat Incentive) on 11 June.
The announcement by Minister for Climate Change, Greg Barker, outlined the Government's response to a consultation on interim cost control for the RHI. He said that a stand-by budget management mechanism will be in place this summer, 'enabling the sustainability of the scheme by allowing us to keep within the budgetary limits set by the Comprehensive Spending Review (CSR).'
In addition, Mr Barker explained the limits set to ensure the supply chain can be maintained with the available funds in this spending review period.
The HPA says that the announcement 'probably means very little in practice as all - including DECC itself - suspect a massive RHI under-spend for 2012/13.' HPA believes that reducing the funding (£108 to £70m) and the notice period for scheme suspension (from 1 month at 80% threshold to 1 week at 97.5% threshold) is likely to have little effect other than to further reduce confidence in the reliability of the incentives.
However, the Heat Pump Association says it is seriously concerned about the message this sends, particularly as it is only a few weeks after a previous interim cost control announcement, which followed industry consultation.
On a more positive note, the Association points out that these measures are to ensure that the funding for 2013/14 is protected 'which presumably means that DECC are at last expecting a much more significant overall uptake when additional renewable technologies such as air source heat pumps are added to the scheme later in 2013.'
