Today's announcement on the Renewable Heat Incentive (RHI) by the Department of Energy and Climate Change (DECC) has been welcomed by the Renewable Energy Association (REA).
A number of tariffs have been added or increased to better reflect real world costs and drive growth in a wider range of technologies.

MP Greg Barker announced that the Government intends to increase the support available for renewable Combined Heat and Power (CHP) plants, large biomass boilers (over 1MW), deep geothermal, ground source heat pumps, solar thermal and biogas combustion >200kWth.

In addition, the Government is introducing new support for air-water heat pumps and commercial and industrial energy from waste, along with improvements to its budget management policy and further policy development on providing increased tariff certainty for large-scale schemes.

Also published today are more details of the domestic RHI, related to budget management policy, phasing of legacy applications and treatment of some types of subsidy, as well as confirming the tariff for solar thermal at 19.2p/kWh, as per the Government's commitment when publishing the domestic RHI policy in July 2013.

The non-domestic RHI provides financial support for commercial and industrial companies to generate green heat. The scheme is also launching for households in the spring.

Chief executive of the REA, Dr Nina Skorupska, said: 'We welcome these improvements to the world's first Renewable Heat Incentive. Although the scheme has under-performed in its first two years, the Government deserves credit for listening to industry's concerns and implementing many of the necessary changes.

'Mixed messages from Government have unnerved many in the renewables sector lately, so today's RHI announcement gives a timely boost to the green economy. There is still room for improvement, but what the RHI needs most now is to be left alone for a while, so the market can develop without fear of further changes.'

The association welcomes the following decisions specifically, many of which follow sustained campaigning from the REA and its members over the last two years:

· Inclusion of air source heat pumps, biogas combustion over 200kW, biomass combined heat and power (CHP), deep geothermal and the full range of waste feedstocks

· Increased tariffs for large biomass, ground source heat pumps and solar thermal

· Modification of tariff reduction triggers to allow for more biomass deployment in view of the scheme's overall underspend to date

Nina Skorupska added: 'Heating accounts for half the UK's carbon emissions, so it's very encouraging to see these technologies receiving the attention they deserve. Add to this the springtime launch of the domestic scheme next year and you've got some of the key policy ingredients for sustainable growth and green jobs in renewable heating.'

NIBE has applauded the Government’s decision to include air source heat pumps in the non-domestic scheme, hailing it as well-deserved recognition of the vital role the technology will play in the UK’s low-carbon future.

Managing director, Phil Hurley, said: “As a manufacturer supplying both the domestic and commercial markets, here at NIBE we welcome today’s RHI announcement. The decision to include air source heat pumps (ASHPs) in the non-domestic scheme represents long-awaited recognition of the unique benefits of this technology, and marks a much-needed step forward in the movement to cut emissions in the commercial sector.

“We are also pleased to see an increase in the non-domestic tariff for ground source heat pumps (GSHPs). Whilst these have not reached the level suggested in the original consultation, increasing tier 1 payments to 8.7p/kWh will undoubtedly provide an important market boost. Heat pumps continue deliver high-performance results in commercial applications across the UK, and we look forward to seeing even more see positive results as the updated scheme rolls out.”

John Felgate, head of technical at leading heat pump manufacturer Stiebel Eltron UK, said: “This announcement is good news for manufacturers and installers alike – there has been much lobbying to include Air/Water source heat pumps as part of the commercial RHI and the industry will be happy that DECC has listened to our advice.

“At Stiebel Eltron UK we have continually called for stronger support from the government and this is another step forward to assist the renewable energy sector. We are also currently lobbying to get DHW heat pumps for commercial projects listed on the Enhanced Capital Allowance (ECA) Scheme, as this will be a further incentive for businesses to go green.”

Kensa's commercial director, Chris Davis, said: 'The ground source heat pump industry is in a better place, with more certainty, than it was last week – it just could’ve been so much better.'

He continued: 'The rise in tariffs is a good thing and the certainty it brings will help the industry move forward. But we are disappointed that the final tariffs are at the lower end of what was suggested in the consultation.

'To make the industry really fly and address the in-balance that has skewed the market in the past two years the tariffs need to be at the top end of what was initially proposed. However the announcement that district heating schemes will be considered a primary measure in ECO is positively received - the onus is now on the energy companies to release the vital funds to support this.'

Separately, the Government has confirmed today that it is to make significant changes to the way it subsidises renewable energy. Support for onshore wind and solar energy will be cut in favour of more support to offshore wind power.

To read the DECC's full announcements go to http://bit.ly/190rM5g and http://bit.ly/IH4g2U