Business and consumer groups are warning that the Renewable Heat Incentive (RHI) could lead to significant rises in energy bills that could threaten the recovery of the manufacturing sector.
The RHI is designed to encourage the installation of low carbon heat sources such as biomass boilers, solar heating and heat pumps. This will be done by subsidising the cost of such equipment for any owner-occupiers that choose to adopt them.
However, the cost of the subsidies will be funded by an increase in energy bills for all consumers. Domestic bills could go up by 9-21%, and industrial bills by 12-35% while large energy users could pay up to 70% more.
Jeremy Nicholson, director of the Energy Intensive Users Group, commented: “They are absolutely intent on rendering our energy prices uncompetitive for industry and far too high domestically, with huge implications for fuel poverty.
“The last Government was not listening and has proposed measure after measure of little cost-effectiveness and with scant regard to the economic consequences.
“We have had a multiplicity of intervention in the market. There is the emissions trading scheme, the renewables obligation, the carbon reduction commitment, the climate change levy, the proposed carbon capture and storage levy, plus feed-in tariffs and renewable heat incentives.
“The cost to business is pretty horrendous and is eroding UK manufacturing competitiveness.”
Source: The Times