The UK will launch the world’s first subsidy scheme for renewable energy heat projects on Monday.
The Renewable Heat Incentive should have started in September but was delayed by attempts to comply with EU state aid rules – the European Commission felt the original rate was too high.
Businesses will be able to apply for a tariff payment for heat generated from biomass boilers, solar thermal equipment and heat pumps installed since 15 July 2009.
Recipients will be paid up to 7.9p per kWh for biomass boilers, 8.5p per kWh for solar thermal and up to 4.5p per kWh for heat pumps.
UK energy minister Greg Barker said the scheme was “a world first and has the potential to put the UK at the forefront of a vibrant new green technology sector”.
Tim Minett, chief executive of UK firm CPL Distribution, which provides wood pellets for biomass facilities, said that the delay to the launch of the RHI had “knocked confidence among board-level decision makers” and claimed that it had left investment in 250 renewable projects “in limbo”.
He said Monday’s launch of the scheme would turn “expressions of interest into real signed contracts, and businesses and the public sector will then start to see the real and substantial savings this incentive scheme will deliver.”