The RHI scheme in Great Britain has failed to meet its objectives or provide value for the expected £23 billion cost to taxpayers, according to an influential Commons committee.
The Public Accounts Committee (PAC) said the scheme, set up in 2011, “simply does not work for households and businesses unable to pay the high upfront costs of renewable and low-carbon heating equipment”.
It found that forecasts of take-up by the Department of Business, Energy and Industrial Strategy (BEIS) were “wildly over-optimistic”, noting that only 60,000 renewable appliances were installed under the domestic RHI compared with 6.2 million gas boilers over almost four years.
As a result, BEIS had had to cut back its expectations of how much renewable heat would be produced by the scheme by almost two-thirds and of the reductions in carbon emissions due to the scheme by almost half.
There was also a “hassle factor” associated with installing the equipment, meaning that consumers were “therefore likely to continue favouring natural gas and oil boilers, which remain relatively cheap, easy to install and continue to be extremely popular across the country”.
The PAC also found that some RHI-funded installations contributed to air pollution, “yet the department still does not have a robust system in place to monitor this impact”.
It found that more than 28,000 biomass boilers had been funded by the RHI, which burn wood and produce smoke that could be damaging to air quality.
Meanwhile, BEIS had no estimate of the amount of money overpaid to participants who had manipulated the scheme’s rules.
The PAC warned that in the remaining three years of the current RHI, “the department must learn as much as possible and ensure it does not repeat the same mistakes in the future”.
PAC chairwoman Meg Hillier said: “Government got it wrong on RHI. The dismal take-up rate tells its own story.”