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Producers of heat from renewable sources are to get incentives similar to those offered to small-scale renewable electricity generators, under an amendment to the Energy Bill.
The Bill, which is on its way through parliament, will include the provision of payment of subsidies in the form of feed-in tariffs to generators of renewable heat of all scales, which will be funded by a levy on fossil fuel suppliers.
Currently 49 per cent of energy is consumed in the UK in the form of heat, and its generation accounts for 47 per cent of carbon dioxide emissions, according to the Department for Enterprise and Regulatory Reform.
Just 0.6 per cent of all heat is generated renewably and with the UK committed to generating 15 per cent of all energy from renewable sources by 2020, this number will need to be improved.
Graham Meeks, chief executive of the Combined Heat and Power Association, said: "We welcome the Governments commitment to introducing a feed-in tariff for micro-combined heat and power and the endorsement this gives to one of the UK's most exciting clean tech industries."
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