Boiler owners using the controversial RHI scheme in Northern Ireland have been handed a raw deal by a rushed Government bid to reduce costs, a Westminster inquiry has found.
Some participants in Stormont’s botched renewable heat incentive now stand to lose hundreds of thousands of pounds in subsidies that will be paid to those using a similar green energy scheme in Great Britain, a report by the Northern Ireland Affairs Committee said.
In the absence of powersharing at Stormont, Northern Ireland Secretary Karen Bradley fast-tracked legislation through Westminster in one day in March to significantly reduce the subsidies paid to RHI boiler owners in the region.
Average payments to boiler owners to help them buy wood pellets are set to decrease from £13,000 a year to £2,000.
The committee held an inquiry into Mrs Bradley’s cost-cutting move, reductions made on the recommendation of officials in Stormont’s Department of the Economy.
Committee members have now called for an urgent re-think on the payment rates, suggesting miscalculations may have been made due to the haste with which the proposals were enacted.
Committee chairman Simon Hoare said: “The need to recalibrate RHI payments has hardly been a secret over the past few years, but our committee’s report found that the Department of the Economy must revisit payments to ensure they are fair.
“RHI participants in Northern Ireland are now facing a raw deal with some payments worth half as much, or more, as in Great Britain or the Republic of Ireland.
“It is entirely possible that the rushed approach taken first by the Department in calculating the upfront and investment costs for participants, and secondly by the Northern Ireland Office in passing the legislation using emergency procedures, has resulted in oversights and miscalculations.
“My committee is calling on the Department to recognise the costs participants have committed to and revisit urgently its calculations.
“Difficulties with RHI have already risked losing public confidence in state-backed schemes, and the Department must address these errors.
“We also want to see an end to Northern Ireland legislation being rushed through Westminster without time for essential scrutiny.”
The RHI was designed to encourage businesses and farmers to switch to eco-friendly wood pellet boilers by offering a subsidy to buy the sustainable fuel.
But errors in its design meant applicants were paid more than it actually cost them to buy pellets, creating a “burn to earn” incentive which left Stormont facing a multimillion-pound overspend bill.
A public inquiry into a scheme which triggered the collapse of Stormont in 2017 is due to report in the coming months.
During committee inquiry hearings, angry farmers and business owners warned that RHI participants were reverting back to burning fossil fuels having lost trust in renewable energy.
They said they had bought the boilers in good faith and had fallen victim to government efforts to save face and cut costs amid the RHI “cash for ash” scandal.
The Committee said the Department must acknowledge that people invested in costly wood burning boilers in the belief the scheme would provide reasonable returns.
The inquiry’s recommendations included:
- The Secretary of State must commit to ending the practice of rushing through Northern Ireland legislation under emergency procedures as a matter of course.
- A buy-out scheme for participants should be amended to allow more people to access it and offers should be open to challenge.
- In revisiting the payments, the Department for Economy should take into account realistic costs of servicing and repairs of biomass boilers, to prevent participants reverting to fossil fuels if boilers break.
In response to the report, a UK Government spokesman said: “The Government passed the essential legislation to reform the RHI scheme at the request of the Department for the Economy in Northern Ireland. This ensured that payments did not cease altogether for the majority of participants on 31st March and protected taxpayers’ hard-earned money. We will consider the committee’s recommendations carefully and respond in due course.”
A spokeswoman for Stormont’s Department for the Economy said: “The Department has received the report from the Northern Ireland Affairs Committee and is considering its recommendations in detail and will respond in due course.”