The government hopes that the Renewable Heat Incentive (RHI) for commercial users — which covers biomass boilers, solar thermal, heat pumps, on-site bio-gas, deep geothermal, renewable combined heat and power, energy from waste, and the injection of biomethane into the grid — will drive a sevenfold increase in renewable heat by 2020 to 73 terawatt hours (TWh) a year.

The RHI is expected to cut carbon emissions by 43 million tonnes a year by 2020, and help create up to 500,000 jobs. But the road to the RHI has been long and rocky. After failing to meet a July start date, its planned launch in September was also abandoned when Brussels said it ran foul of EU state aid rules.

The scheme was finally approved in October, after the Department of Energy and Climate Change slashed the tariff for large biomass projects from £0.027 ($0.042) per kWh to £0.01. Other tariffs remain the same at £0.076 and £0.047 for small and medium biomass, respectively; £0.043 and £0.03 for small and large ground-source heat pumps; £0.085 for solar thermal less than 200kW; and £0.065 for biomethane injection and biogas combustion less than 200kW.

The industry says the RHI is innovative, and will be a significant boost, but warns that the cut in tariff for biomass projects above 1MW means it may not achieve the government’s forecasts.

Paul Thompson, head of policy at the UK’s Renewable Energy Association, says: “The effect of the reduction in large biomass tariff hasn’t been published, but it will mean less deployment at that scale.”

Matt Hindle, policy advisor to the Anaerobic Digestion and Biogas Association, agrees: “The delays have not only caused problems for some individual projects, but also harmed wider confidence in the renewable financial incentives, which has been particularly unhelpful for projects trying to find finance.”

The government is expected to begin consulting in January on an RHI scheme for residential users