World's first Renewable Heat Incentive launched to reduce emissions

• £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.

• Currently around half of the UK’s carbon emissions come from the energy used to produce heat – more than from generating electricity. The RHI will reduce emissions by 44 million tonnes of carbon to 2020, equivalent to the annual carbon emitted by 20 typical new gas power stations .
• over 95% of heat in the UK is currently produced by burning fossil fuel but with North Sea supplies now in decline leading to an increase in imports, low carbon alternatives are needed.
• The new financial incentive will encourage installation of equipment like renewable heat pumps, biomass boilers and solar thermal panels to reduce emissions and support the existing 150,000 jobs in the heating industry.