Economy Minister Caoimhe Archibald has confirmed the non-domestic Renewable Heat Incentive (RHI) scheme will close in NI.

Speaking in the Assembly chamber on Monday, Minister Archibald said the Stormont Executive has agreed a way forward, with the next step being an eight-week public consultation on the proposed closure arrangements.

A Bill will also be introduced to the Assembly which will clarify Department for the Economy (DfE) powers to close the scheme.

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“It is my intention that new regulations will take effect by April 2026,” confirmed the Minister on Monday.

Originally launched in 2012, with funding coming from the UK Treasury, the RHI scheme was initially set up with untiered and uncapped payments. However, by 2016 there were major concerns of a significant overspend which would have to be met using Stormont finances.

Subsequent changes to tariff rates drastically cut expenditure, but actually led to an underspend. On Monday, Minister Archibald acknowledged that since 2020, over £100m of funding for renewable heat has gone unutilised in NI.

However, closing RHI, would “free up” DfE to engage with UK Treasury on a scheme that could potentially utilise £10m per year.

She also confirmed that closing RHI could cost as much as £196m, spread over the next 10 years, with “the right balance” to be struck between protecting the taxpayer and ensuring scheme participants receive payments to which they are legally entitled.

It is expected that as DfE work towards closure of the scheme, new tariff rates will come into effect, potentially from November 2025. For a typical boiler installation, the tariff will increase from 2.2p/kWh to 6.1p/kWh.

Realistic

The announcement by Minister Archibald has been “cautiously welcomed” by the Ulster Farmers’ Union (UFU). “We are glad to see that the new proposed tariff uplift is much more realistic for our members, and we look forward to seeing the full details of the consultation,” said UFU deputy president, John McLenaghan.

The Renewable Heat Association for NI (RHANI) described the announcement as “the first step towards a fair conclusion to the issues”.