Energy Minister Baroness Neville-Rolfe has unveiled changes to the Renewable Heat Incentive.

In a speech at the Policy Exchange think tank’s “Heat Summit”, she pointed out that heat accounts for 45% of UK energy consumption and more than 30% of carbon emissions.

The minister said consumers spend well over £30 billion a year on energy for heating, but around half of homes could reduce this cost through “relatively simple and low-cost improvements in energy efficiency costing under £500”.

Measures under the RHI reforms include maintaining support for solar thermal at 19.74p/kWh for the next seven years.

Tariffs for air source heat pumps and ground source heat pumps will rise to 10.02p/kWh and 19.55p/kWh respectively.

Biomass installations will receive an increase in their tariff to 6.44p/kWh, matching the level that was last available between October and December 2015.

Electric heat pumps and biomass boilers

Neville-Rolfe said: “Homes and businesses not on the gas grid have the most potential to save on fuel bills and to decrease carbon emissions by switching to low carbon heating technologies.

“I am launching improvements to the RHI scheme that will do more to encourage households and businesses to install electric heat pumps and indeed biomass boilers, instead of conventional fossil fuel systems.

“The reforms will also make sure we are improving the value for money of spend through the scheme and that consumers are protected.”

Nina Skorupska, Chief Executive at the Renewable Energy Association, responded: “The reforms to the RHI are an improvement to the earlier consultation and will go some way to grow an effective renewable heat sector in some cases to 2021.”

> Read Neville-Rolfe's speech in full