Objections from the European Commission has delayed the launch of the Renewable Heat Incentive.
The Department of Energy and Climate Change (DECC) planned to open the scheme for applications for non-domestic generators on 30 September 2011. However, the European Commission has expressed concerns that the large biomass tariff is set too high and will require the RHI regulations to be further amended before they can be formally launched.

State aid approval is a necessary condition for the scheme to go ahead and so the RHI will now need to be subject to further Parliamentary scrutiny and approval.

DECC has released a statement: 'We understand that the Commission has given state aid approval for the RHI, subject to a reduction in the large biomass tariff, and we expect to receive written confirmation of this very soon.

'Changing the large biomass tariff will require the RHI regulations to be amended and submitted to Parliament for approval. We are unable to launch the scheme as a whole until this process has been completed. Therefore, unfortunately, we will not be able to open the scheme for applications on 30 September 2011 as we had originally planned.

'Once we have received written confirmation from the Commission, we will make a further announcement about what this means for the large biomass tariff and the timing of the launch. We are committed to launching the scheme as soon as possible to minimise disruption to stakeholders.'

William Worsley, president of the Country Land and Business Association, told the Guardian: 'Many members have been gearing up to launch projects... while others have already taken the plunge and will face cash flow problems as a direct result of the commission's intervention.'

Paul Thompson, head of policy at the Renewable Energy Association (REA), said: 'The industry has been gearing up over the last six months to deliver on the Government's ambitious plans for renewable heat. This further adds to low confidence levels in the renewables industry as a whole, added to uncertainty around the feed-in tariffs, the renewables obligation and the renewable transport fuel obligation.'

DECC had planned to introduce the scheme in two phases. In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users - the industrial, business and public sector - which contribute 38 per cent of the UK's carbon emissions. Under this phase there will also be support of around £15 million for households through the Renewable Heat Premium Payment.

The second phase of the RHI scheme will see it expanded to include more technologies as well as support for households. This transition will be timed to align with the Green Deal, which is intended to be introduced in autumn 2012.