Government failed to control costs of green heating subsidy

Government failed to control costs of green heating subsidy

New research from the National Audit Office (NAO) says a government scheme to encourage renewable heating systems through subsidies has “not achieved value for money”.

The Renewable Heat Incentive (RHI), introduced in 2011, was designed to encourage a move to low carbon heating, by paying consumers for up to 20 years.

As of August 2017, the government had paid £1.4 billion through the scheme, with an estimated lifetime total cost of £23 billion by 2040-2041.

The NAO report found that the government did not have a “reliable estimate” of how much it had overpaid for customers that had not complied with regulations, which could “accumulate to reduce the scheme’s value significantly”.

Predicted numbers of participants were found to be just over a fifth of the government original target of 513,000 by March 2021, at 111,000 by the same date.

Meg Hillier, MP and chair of the committee of public accounts, said: “Given the scandal that engulfed a similar scheme in Northern Ireland, it is worrying that the Department of Business, Energy and Industrial Strategy and Ofgem [the energy regulator] don’t know how much they are really getting out of this scheme in return for taxpayers’ money.”

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