New proposals will change Renewable Heat Incentive (RHI) payments from being based on meter readings to be calculated on historic heat usage.

In a public consultation about closing the scheme, it is proposed that RHI claimants who still use accredited boilers will get annual payments for the rest of their 20-year scheme agreement.

The Department for the Economy (DfE) have proposed 2017-19 as the “most balanced and appropriate period” to assess historic heat usage for calculating the new payments.

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“[The] scheme had known flaws in its early years (2013–2017), which may have distorted boiler usage. After 2019, the Department observed a significant drop,” the consultation reads.

It is proposed that the new arrangement will come into effect “in 2026”, ahead of the energy regulator OFGEM withdrawing from its role in administering the scheme in April 2026.

“Without OFGEM’s IT systems and expertise, the Department cannot continue to administer the scheme in its current form,” DfE state in the consultation document.

Politicians

At Stormont on Wednesday, some MLAs appeared critical of the proposals and argued that the ongoing annual payments to RHI participants did not constitute scheme closure.

Sarah Brady from DfE subtly suggested that the current proposal was the best option for avoiding another legal challenge by RHI claimants.

“The participants in the scheme have article one, protocol one of the human rights act rights to receive payments,” she said.

The DfE official said a one-off payment to RHI claimants to wind up the scheme immediately was considered, but annual payments were seen as the “fairest and best value for money” option.

Brady said DfE have been more active in engaging with scheme participants ahead of publishing its latest proposal for RHI and feedback so far has been “broadly positive”.

MLAs were told that the cost of the proposal is similar to the projected cost of RHI if the scheme remained open in its current form.

Brady said this comes to £196m for the main scheme budget, plus £17m for administration and auditing costs.