The government have published their annual energy statement. Action 13 states: "We will set out detailed proposals for taking forward the Government’s commitment to renewable heat through the Spending Review."
They support this statement by their commitment to a 12% target for renewable heat by 2020
Stating "This Government is fully committed to taking action on renewable heat."
From a creative destruction perspective it is interesting to see how the market is responding.
The gas market clearly has most to loose from renewable heat. They are having to import more, prices are rising, and gas heating is by far the most popular form of heating.
"We've cut our boiler and standard installation prices by a third and if you call by the 31st July we'll also give you 12 months boiler and central heating care (2 years if you're a British Gas customer)."
Whilst the existing market is competitive, this seems to be getting commitment from potential customers in advance of any firm announcement.
In the heating market there is a "heating season". Not every boiler is sold during this time, but there are clearly people who turn their system on and find it does not work, or breaks down during Autumn. This makes September to Christmas a really busy time in this market.
Consumers are not well informed at the moment - not because they do not want to be - but because there is lots of conflicting information out there - most of which is wrong or misleading.
The present conservative (is it really a coalition?!) believe in markets. Markets are not just the city financial markets, but the markets that we see all around us. Consumer and business confidence is low at the moment and the job of government is surely to provide some leadership ie direction.
They are making cuts and reducing the size of the public sector purse. They expect that the private sector will "fill the void".
With what?
If you were a business person at the moment - what would you invest in? In the renewable heating market many companies have invested already. They are just sat there waiting. Other markets have been heavily hit by the cuts, or by the recession. e.g. Were you in construction you have had the double burden of the schools programme being cut whilst the housing market looks set to fall again.
Leadership is really important to the renewal process - there seem to be very few people willing to take a lead. Is the consequence further inactivity. Economists are very cautious that the growth estimates for the UK are too optimistic whilst we are in a space where there are cuts, drops in spending, and no leadership.
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