What has RHI really cost us, and has the overspend been stopped?

In part, it is – at least for now. The massive cuts to payments, first rushed through by the DUP prior to Stormont’s collapse and as a direct result of the public outcry over cash for ash, almost ended what at that point was projected by civil servants to be an overspend of about £500 million.

The cuts were too late to prevent an overspend of tens of millions of pounds, and massive bills to cover the cost of the inquiry and other work to sort out the mess.

Those changes were then followed by far deeper cuts to subsidies which were voted through by MPs in 2018 while Northern Ireland had no devolved government. That legislation slashed payments from a notional annual maximum of £56,000 for someone running their boiler around the clock every day of the year on the uncapped RHI scheme, to just £2,100 a year.

That financial benefit for taxpayers has come at a significant human cost, putting some genuine RHI claimants in severe financial difficulty because of the huge loans they took out on the back of Stormont’s promise of unalterable 20-year payments.

It has also carried a significant reputational cost for Northern Ireland’s government which in this situation has been shown to business to be unreliable even when a government minister gives the most categoric promise possible about the certainty of a government scheme.

The retrospective cuts to subsidies also now mean that there is a massive underspend on the money available from the Treasury to move away from dirty and unsustainable fossil fuel heating systems.

Northern Ireland is now the only area in the UK or Ireland without a government subsidy promoting renewable heat.

Stormont’s Department for the Economy estimates that there will now be an underspend of £390 million. In fact, the underspend is likely to be far greater because officials does not appear to have considered that many boilers are likely to drop out of the scheme over the next 16 years.

The department wants to reopen a new renewable heat incentive (almost certainly under a different name) in an attempt to both promote green energy and use the Treasury money available to Northern Ireland for that purpose.

But it faces a massive problem. Having abandoned its own promises so spectacularly this time, it would have to make the payments – whether an ongoing payment or a one-off grant – extraordinarily lucrative to encourage businesses to give it a second chance.

But that is impossible based on the department’s own argument. It has said that the absolute maximum it can pay someone is £2,100 a year and anything beyond that would constitute illegal state aid.

Until the issue is resolved, Northern Ireland’s businesses are now at a clear disadvantage to their GB and RoI competitors who are receiving huge payments under comparable RHI schemes.

The current situation – where the overspend has for now been eliminated – rests on the quicksands of legal uncertainty.

Boiler owners have challenged the retrospective cuts to their payments and have vowed to take their fight to the Supreme Court or even to European judges.

That process is likely to take years to be resolved conclusively. Because it is impossible to be sure how courts will rule on an area of extreme complexity, until a verdict is given it is impossible to know what the final bill will be. If the boiler owners’ case succeeds then there will be a reinstatement of cash for ash – and perhaps a new raft of legal claims against Stormont for the effects of years in which businesses lost what had been guaranteed to them as a guaranteed cash flow.

Even now, some four years after the scheme was shut to new entrants, this story is far from over.