In the last few days, the Government have initiated a funding competition to accelerate the deployment of renewable heating technologies in the social housing sector.

The Renewable Heat Incentive is a fixed Government subsidy for heat produced from installed renewable sources. The Government will make a payment based on a pence/ KwH rate of heat produced. The intention is to drive uptake of renewable heating to achieve 12% of total heat consumption in the UK by 2020. In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users - the industrial, business and public sector The second phase of the RHI scheme will see households moved to the same form of long-term tariff support offered initially to the non-domestic sector.

Individual householders are presently supported through the Renewable Heat Premium Payment, a grant scheme providing funding for renewable heat sources.

On 15 August, the Department of Energy and Climate Change announced that this grant scheme will be extended to social housing providers. The Energy Saving Trust is inviting bids for funds to support value for money proposals from Registered Providers of social housing. Aid of up to £175,000 is available for projects installing biomass boilers, solar thermal systems, ground source heat pumps, air to water source heat pumps and water to water source heat pumps. Organisations may submit a bid for one or multiple projects (e.g. projects in adjacent areas), provided that the combined total funding does not exceed £175,000.

£3 million will be available under the new scheme which should in total finance at least 17 social housing projects.

The bids will be evaluated by a panel of experts on criteria including value for money, the number of individual installations, the opportunity for learning and the number of homes not supplied by mains gas.

The application form is available from the Energy Saving Trust website:

http://www.energysavingtrust.org.uk/Media/node_1422/RHPP/Social-Housing-Competition-to-bid-form

Applications must be submitted no later than noon on Thursday 15 September 2011 so the window for submitting bids is a very limited one. The expectation is that this competition will only be run once.

It is important to note that the Government has not yet published its proposals for how the Renewable Heat Incentive will work in the domestic sector, so there is no guarantee at this stage that those eligible for a Renewable Heat Premium Payment grant will also be eligible for the Renewable Heat Incentive tariff payments. Nevertheless, the scheme gives a clear indication that the Government understands the need to incentivise affordable renewable heating in the social housing sector.

For further information please contact Bruce Farquhar, Martin Whiteford or your usual contact at Anderson Strathern.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.