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OFGEM claims RHI north south divide

According to the first quarterly OFGEM review of homes installing renewable heating technologies under the Government’s domestic Renewable Heat Incentive (RHI) scheme, the largest take up has been in the south of England, underlining concerns that the RHI is only viable for more affluent homeowners.

 Although the RHI is targeted towards off gas grid homes, the report shows that almost half (45.9%) of the households adopting the scheme are in the south of England – the part of Britain with the highest concentration of homes connected to mains gas.

By contrast, in areas with a much higher percentage of off-gas grid homes, such as Wales and Scotland, far fewer homeowners have taken up the scheme - just 5.2% and 16.5% respectively of the overall total.

OFTEC says the figures highlight the regressive nature of the RHI as it will only benefit the small minority who can afford the high upfront costs of between £9,000 and £14,000 to install renewable technologies.

OFTEC director general Jeremy Hawksley (pictured) said: “It’s no surprise that the highest take up of the RHI has been in the most affluent parts of Britain. These homeowners can afford to change and, with interest rates remaining low, the RHI is little more than an alternative investment opportunity which adds even more value to their properties.

He continued: “But what about the large percentage of off gas grid homes who simply can’t afford to get started with the RHI? The government is pushing all off grid homeowners towards the RHI in order to reduce their carbon emissions but, for most, the high upfront cost effectively excludes them.

“With almost 30% of rural households in England and 47% in Wales currently living in fuel poverty, this approach makes no sense at all.”

 A recent survey conducted by OFTEC and Watson Petroleum of 750 oil heated homes showed that just 4% would consider switching to an air source heat pump while 73% would choose to upgrade to a new oil condensing boiler.

OFTEC has been urging the government to introduce a simple, all-inclusive boiler scrappage scheme. It says this would appeal to a much wider audience and go much further than the RHI in helping the Government to achieve its carbon reduction target of 80% less emissions by 2050. 

Jeremy Hawksley concluded: “The Government needs to drastically reconsider its approach to low carbon heat. Instead of pushing expensive, complicated schemes like RHI which will only appeal to the wealthy minority, it should look at where the real needs lie and introduce a realistic scheme, such as boiler scrappage, which would be feasible for the majority, even the fuel poor.”

 

17 September 2014

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