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Renewable Heat Incentive launched

World's first Renewable Heat Incentive launched to reduce emissions - 10 March 2011

£860m government scheme expected to increase green capital investment by £4.5 billion up to 2020, stimulating a new market in renewable heat;
Incentive to increase number of industrial, commercial and public sector installations by seven times to 2020
A full system of RHI payments will be available to households from October 2012
In the interim, more than a quarter of the first year’s budget to be guaranteed for up to 25,000 household installations through a “RHI Premium Payment” to encourage take-up;
150,000 existing manufacturing, supply chain and installer jobs to be supported

The world’s first financial incentive of its kind to revolutionise the way heat is generated and used in buildings has been launched by Energy Secretary Chris Huhne.

The Renewable Heat Incentive (RHI) will support emerging technologies and businesses in the UK, strengthening security of supply by reducing dependence on fossil fuel heating and emissions.

Energy and Climate Change Secretary Chris Huhne said:

“Renewable heat is a largely untapped resource and an important new green industry of the future.

"This incentive is the first of its kind in the world. It’ll help the UK shift away from fossil fuel, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies.”

Renewable heating subsidy scheme to be unveiled
Subsidies for renewable heating systems in England, Scotland and Wales will be announced later by the government.

Money will be given to those who choose technologies such as wood chip burners instead of cheaper but more polluting fossil fuel heating systems.

Some £860m of government cash will be spent over four years on the scheme.

Most of the burning systems are likely to be located at schools, hospitals or community housing because of the size of the equipment involved.

But there will also be incentives for householders who put solar panels on their roofs to heat water or install heat pumps to get heat from the ground.

BBC environment analyst Roger Harrabin says that more carbon emissions come from heating for homes and industry than from generating electricity.

Ministers will therefore announce plans to get more heat from burning wood or crop waste which is carbon neutral, unlike using fossil fuels, he adds.