But it said insufficient detail and the absence of a timetable for implementation risks watering down the impact and suggested it was up to industry to keep the Government on track.
The comments were issued last week after Ed Miliband, the energy and climate change secretary, tabled two amendments to the Energy Bill: the renewable heat incentive (RHI) and the feed-in tariff (FiT).
Under the RHI, householders, businesses and community groups will receive a set payment per MWh for the quantity of heat produced via renewable sources including biomass, biofuels, fuel cells, solar power, water (including waves and tides), geothermal, heat from air, water or the ground, and combined heat and power systems.
“The RHI will apply to all renewable heating projects, from individual households to large industrial units,” a Department for Energy and Climate Change spokeswoman said.
“In order to meet our ambitious climate change targets we want to make investing in renewable heat, which is a low carbon technology, more attractive.”
Under the FiT amendment, anyone installing a small-scale, low-carbon electricity generator up to 3MW – the same size as the largest commercial scale wind turbine – will receive a ‘financial incentive’ for any excess green energy they sell back to the National Grid.
Tony Bowen, Heat Pump Association president, said: “This is very laudable action from the Government and very much in line with its renewable energy strategy. We would welcome any financial support for renewable heating technologies.”
David Matthews, Solar Trade Association chief executive said: “We are fully behind both amendments and are pleased the Government has decided to move forward on this. However, as ever, the devil is in the detail. The amendments are worded in such a vague way it enables the Government to do something or nothing.”
The criticism was echoed by Phillip Wolf, Renewable Energy Association director-general who added: “The lack of any firm timetable shows there’s still a long way to go.”
Mr Matthews continued: “This suggests once these amendments have been OK’d into the Energy Bill it will be up to the industry to work with DECC to develop a sufficiently robust policy which will support FiTs and RHIs.
“We will also have to ensure that a sensible uplift level is put in place to make it financially worthwhile for people to switch to using renewable heating in place of their current fuel. Currently they are proposals of 2p per kilowatt for renewable heat and 40p per kilowatt for electricity. There must be some realism employed by the Government if the RHI is to incentivise take-up.”
He added: “There are also big questions around the deeming mechanism. For instance, how is this going to work, and who is going to administer the schemes? Will it be a utility or a Government administrator? We need to ensure that the approach behind both incentives are right.”