News: Analysis
Will the RHI help the fuel poor?
With OFTEC and other dissenting voices
claiming the domestic RHI is reserved for
only ‘the wealthy few’, Maria Wardrobe
of fuel poverty charity NEA calls on
the government to tear down financial
barriers and make the scheme accessible
to all
Heat has long been the forgotten
element of UK energy policy,
however, last year the UK
government set out its proposed
approach to decarbonising the
sector. The general approach
of the Strategy is to squeeze
fossil fuels out of heating by
2050 through demand reduction,
development of district heating
and a massive expansion of
electric and renewable forms of
heating in suburban and rural
areas. The strategy highlights
that these technologies have
an important role in alleviating
fuel poverty. However, NEA
has concerns that despite
the potential, without further
intervention, there will continue
to be a lack of equal access for
the poorest households.
The main issue relating to
accessibility of microgeneration
technologies is that existing
incentive mechanisms, such
as the Feed-in Tariff and now
the new domestic RHI, provide
an operational incentive rather
than a contribution towards the
capital costs associated with
the installation. NEA believes
up-front capital costs represent
one of the biggest barriers to
increased take-up of renewables
by financially disadvantaged
households. Where capitalisation
of an operational incentive is
offered (or a free PV type deal is
accessible to Registered Social
Landlords) NEA’s research
indicates that it is not always
clear that the benefits that accrue
to the tenant are not consistent
with affluent households. As
long as this key financial barrier
remains unaddressed, fuel poor
households will largely be unable
to benefit from the operational
incentives targeted at these
technologies.
So, what can be done?
In short, NEA believes the
government must recognise that
it is possible to ring-fence an
element of the current domestic
RHI budget to provide the
necessary upfront capital support
for low income households.
Following termination of the
Warm Front scheme in January
2013, England is the only UK
nation without a government-
funded energy efficiency
programme. Before the closure,
eligible applicants to Warm Front
were guaranteed to receive
assistance and could benefit from
a grant of up to £6,000 to those
off the gas-grid. The grant could
be paid for measures such as
insulation and alternative heating
such as more efficient electrical
heating, oil heating systems and
renewable heating. Moves to an
RHI ring-fence would address
this current gap in provision.
One thing is for sure, the
replacement programme, the
ECO, in its current form is not
going to fund these measures.
Therefore NEA will continue
to urge policy makers to accept
the need for further changes
to the current schemes and
the need for further adequate
resources. The recent proposed
changes to the ECO further
underline the need for additional
support, especially for fuel poor
households inhabiting solid wall
properties. In this context, NEA
is committed to promoting the
wider benefits that a much more
ambitious energy efficiency
programme can provide.
Specifically, NEA will continue
to support the objectives of the
Energy Bill Revolution campaign
and continue to help develop
the positive case for recycling
revenues from environmental
taxes such as EU-ETS and the
Carbon Floor Price back into
energy efficiency programmes
that can help beat fuel poverty.
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