MLAs have voted to pass legislation formally closing Northern Ireland’s controversial Renewable Heat Incentive (RHI) scheme, marking a decisive step toward ending the long-running “cash-for-ash” saga. The RHI (Closure of Non-Domestic Scheme) Bill completed its Final Stage in the Assembly on 12 May 2026 and now awaits Royal Assent before becoming law.
The Bill establishes only the legal framework for closure; detailed operational arrangements—including how much participants will receive and how payments will be calculated—will follow in separate regulations subject to Assembly approval. The scheme, which has dogged Northern Ireland politics since 2016 and contributed to the collapse of devolution in 2017, currently supports approximately 1,200 participants operating just under 2,000 boilers.
Minister Hails ‘Right Thing to Do’
Economy Minister Dr Caoimhe Archibald welcomed the Assembly’s support, stating the legislation strikes a necessary balance between participants and taxpayers. In a statement issued after the vote, she said:
“Bringing the Scheme to an orderly close and putting in place arrangements that deliver a fair outcome for all – for both those who participated in the Scheme in good faith, and the taxpayer – is the right thing to do.
“I am grateful to all those involved in preparing and scrutinising this Bill. My Department will now move quickly to share the next steps with the Committee, to allow further scrutiny, and to conclude the formal processes as quickly as possible.”
Speaking during the Assembly debate, Dr Archibald emphasised the Bill’s foundational role in the broader closure process. She told MLAs: “This Bill is vital as it lays the foundation for the closure of the scheme, reiterates the department’s commitment to ensuring that this is achieved in a way that is fair to the participants and to the wider taxpayers.”
What Closure Looks Like in Practice
While the Bill is now poised to become an Act, the practical mechanics of closure remain to be settled. The Department for the Economy has confirmed that:
- Participants will move from quarterly tariff payments based on metered heat to annual payments calculated using historic heat output data from the 2017–2019 period
- Payments will continue for 10 years (until 2036 for the last accredited installations), staggered rather than provided as a single lump sum
- The total cost of compensation and closure administration is estimated at £196 million over the next decade
- Ofgem will cease administering the scheme from April 2026, after which the Department will take direct control
- A temporary uplift in tariffs will apply during the coming winter period ahead of the final closure regulations
Andrew Trimble, chair of the Renewable Heat Association, told the BBC that the development offered long-awaited certainty. “We’ve now got some confidence and there seems to be an appetite across all political parties to resolve this once and for all,” he said. “These are first steps, let’s hope that the momentum can be sustained.”
Scrutiny Concerns and Missing Details
Despite the Bill’s passage, Assembly scrutiny has highlighted significant gaps in the legislation itself. The Committee for the Economy noted that the Bill contains only one active clause setting out high-level regulation-making powers. Consequently, it includes no detail on key closure issues:
- The specific closure tariffs
- How historic RHI data will be used to calculate payments
- The precise banding arrangements for different levels of boiler usage
The Committee’s report emphasised that these details will be crucial to ensuring the closure complies with State Aid rules, Treasury requirements, and value-for-money tests. The Department has committed to bringing a paper to the Executive in December 2025 to confirm the closure regulations, with the consultation response published earlier this year informing those decisions.
The Shadow of the Inquiry
The RHI scheme’s troubled history continues to cast a long shadow. Launched in 2012 to encourage businesses to switch to renewable heating, it lacked cost controls and paid subsidies higher than the cost of fuel, creating an incentive to “burn to earn.” The projected overspend—once feared to reach £700 million—contributed to the collapse of the Executive in 2017 and triggered a public inquiry that cost £13 million.
Four years after that inquiry reported, reform of the civil service and governance structures it recommended remains incomplete. A Northern Ireland Audit Office report published in October 2024 found that only 26 of the 42 recommendations had been implemented, with five deemed unlikely to be properly addressed by current plans. Particular concerns remain around record-keeping standards and ministerial accountability—issues directly relevant to how the closure scheme will be administered over the next decade.
Critical Questions Ahead
As the Bill moves toward Royal Assent and the Department prepares detailed regulations, several questions remain unanswered:
- Will the closure regulations provide sufficient granular detail to satisfy the Committee’s concerns about transparency and audit trails?
- How will the Department verify that installations remain operational during the 10-year payout period without Ofgem’s metering infrastructure?
- Given that over £100 million in renewable heat funding has gone unutilised since 2020 due to the delay in closure, what replacement decarbonisation support will be introduced—and when?
- Will the remaining RHI Inquiry recommendations regarding civil service accountability be implemented before the scheme makes its final payments in 2036?
The Bill’s passage represents a milestone, but with payments continuing until 2036 and administration costs running to £17 million over the next decade, the “cash-for-ash” story will continue to feature in Northern Ireland’s public finances and political discourse for years to come. The Department for the Economy has indicated it will now move swiftly to share next steps with the Committee for the Economy to allow further scrutiny of the regulations before they come into effect next April.