Uncertainty over the future of the Renewable Heat Incentive has created a hiatus in the heating industry at a critical point, experts have warned.
The £27 billion tax on heavy industry to fund greener technology could be scrapped as part of the government’s Comprehensive Spending Review in October, amid speculation that heat pumps are only “variably” effective at heating homes.
But experts say that sales of solar thermals have dropped off entirely while customers wait to see if the scheme will be axed.
Mott MacDonald technical director Brian Mark said: “It will be a complete disaster if the scheme is scrapped.
“They’ve already announced the Feed-in Tariff so orders for solar thermals have effectively stopped. There is now a hiatus in the industry just at the point we don’t need it.
“Essentially, by bringing in feed-in tariffs, they’ve done half the job. Unless they go through with the scheme they’ll disturb the market.
“Leaving it unannounced like this isn’t good government. It just shuts down the industry.”
A spokesperson for the Department of Energy and Climate Change refused to deny the rumours and said that it would be “irresponsible under the current circumstances” for the government to overlook the scheme at the spending review.
HVCA technical officer Bob Towse said: “There is a real risk that comes with this decision.
“What are we going to do to help the consumer realise schemes like this are needed? We have ambitious targets to hit - inevitably the customer will have to pay for greener energy. The only real alternative is a huge tax.”
The subsidy, which was due to be introduced in spring next year, is likely to raise gas bills by up to £104 for domestic consumers and £321 for industrial customers by the end of the decade. It could raise around £1,000 a year to households that generate their own green heat.
The Energy Saving Trust, which has been conducting trials into how the heat pumps work for over a year, has found their performance to be ‘wide-ranging’, raising further questions over the viability of the scheme.
A spokesperson for the trust said: “Out of 83 sites monitored across the UK during the trial, results indicated wide-ranging performance.
“We are aiming to secure funding for a second phase of the trial so we can work out what is causing this variation, focusing on exactly what determines a high-performing heat pump retrofit installation and ensure this becomes standard practice.”
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