A proposed increase to Renewable Heat Incentive (RHI) tariffs is an “interim step” before the scheme is shut down, a Department for the Economy official has said.

In a letter to Sinn Féin MP Cathal Mallaghan, Sarah Bradley from the department said the proposed regulations will see RHI payments increase from 1 November 2024.

“The tariff uplift is an interim step while closure proposals are being developed and progressed,” the letter states.

Under the proposals, the tier one tariff for medium-sized boilers is to increase from 2.1p/kW to 5.1p/kW.

The tier two tariff, which applies after the first 1,314 hours of boiler usage, will be set at 1p/kW and compares to no available tier two tariff at present.

Bradley said RHI payments were being revised because fuel prices have changed since 2019 when the current tariff rates were set. The new tariffs are based on average biomass and kerosene prices from April 2020 to March 2023.

“This assumed differential provides a tariff that is considerably higher than in 2019 and is intended to more closely reflect the likely future fuel price differential,” Bradley said.

She also dismissed claims from some RHI participants that the tariff rise could only apply for five months until the end of the current financial year.

“Under the proposed regulations, they will apply up to the end of March 2025 and will then increase in line with inflation,” Bradley said.