After much recent speculation about the fate of the Renewable Heat Incentive in the upcoming comprehensive spending review, nuggets of hope from the Conservative Party Conference yesterday. In his speech, Minister of State in the cabinet office Oliver Letwin, MP confirmed the Government’s support for an RHI: “Our incentive for renewable heat will bring forward the generation of heat from waste and other renewable sources - a crucial part of cutting carbon and maintaining energy security,” he said. As our CEO Juliet Davenport commented, "It’s great news the Government is supporting the Renewable Heat Incentive – now we need to hear the details and find out the level of payments and how it will be delivered."

Not surprisingly, we’ve got our own ideas about this.

Heat accounts for 47% of the UK’s carbon emissions, while renewable heat is currently only 1% of overall heat demand. An effective RHI is an essential step towards a low-carbon future, and could boost this to as much as 12%. Good Energy has been offering our own version of the RHI – HotRocs – since September 2008. The way this works is that our gas customers pay a small levy which creates a pot of money to spend on research and to provide our customers with solar thermal installations a payment of 4.5p/kWh of deemed heat produced. The Good Energy HotRocs initiative currently supports over 450 solar thermal users, equating to a reduction in CO2 emissions of 270 tonnes a year.

An equivalent UK-wide scheme for renewable heat based on the current Feed-in Tariff scheme would be simple to implement.

Here’s how it could work:

Because of the support gas customers received from government when building the gas grid – which off-gas-grid users have not benefitted from – the levy should be solely on gas suppliers. Off-gas-grid users should be entitled to the support of the RHI without cost to compensate for the earlier financial losses. As with the Feed-in Tariff, off-gas-grid customers should be able to request that a mandatory RHI supplier acts as their RHI provider, even though they are not a gas customer.

Heat metering is expensive, but deeming heat production is a recognised methodology, and field trials by various organisations such as the Energy Savings Trust are improving it all the time, making the RHI simpler than the Feed-in Tariff.

Administering the RHI and possibly the Feed-in Tariff will also be more cost-effective for both Ofgem e-serve and the Utility companies if it is done by cloning the existing Feed-in Tariff systems. This would save costs which are ultimately borne by energy customers.

A UK-wide RHI will also be instrumental in addressing fuel poverty as, like Feed-in Tariff, it provides an opportunity for social and private landlords to earn an income in return for their investment in renewable technology, whilst providing free heat to their tenants.

We know it can work because we’re already doing it.

Our partners Friends of the Earth have launched a campaign calling for the government to introduce the RHI – please show your support by writing to your MP. Together we do this.