Renewable Heat Incentive Inquiry examining botched energy scheme
Biomass boiler installers Alan Hegan and Connel McMullan face inquiry
Inquiry set up after public concern over scheme's huge projected overspend
Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
Public hearings in critical phase with high-profile witnesses giving evidence
Quite a bit later than usual, the inquiry finishes up for the day after plenty of interesting evidence about the RHI debacle as viewed from a business angle, rather than a political one.
Tomorrow the inquiry will hear from Michael Doran of Action Renewables - join us from 09:45.
Good evening for now...
Jayne McCormack
BBC News NI politics reporter
The fallout from the RHI scandal has "destroyed" the renewable heat industry in Northern Ireland, the inquiry heard.
Image source, RHI InquiryAlan Hegan, who runs a biomass boiler firm, claimed that "the amount of bad press" surrounding the sector meant that nobody wanted to invest in renewable heat, meaning firms were being forced to shut.
He said the business community's confidence in Stormont's economy department had been "absolutely eroded" given how the closure of the scheme had been handled.
Connell McMullan says his company it isn't banking on selling any biomass renewable heat products in Northern Ireland in "the next decade".
Image source, PAAlternative Heat Ltd now does much of its work in Great Britain and it "continues to grow" - he's thankful he has that market in the wake of the RHI scheme.
The RHI fiasco has had a detrimental effect on the renewable heat industry in Northern Ireland, he says, and he doesn't envy any boiler firm working solely in the region because they have a "cliff-face to climb".
Unlike the previous summer, the lines of communication between DETI and Connel McMullan's company appear to have dried up by February 2016 when the RHI scheme's closure was announced.
He says his firm wasn't asking any questions up until that point because there didn't appear to be any problems with the scheme after the cost controls had been introduced in the previous November.
But inquiry barrister David Scoffield QC produces an email sent by Alternative Heat Ltd's Fergal Hegarty to DETI at the end of January 2016, asking about a public consultation on the scheme's shutdown.
Inquiry chair Sir Patrick Coghlin wants to know if it's correct that Mr Hegarty - who the inquiry hasn't bee able to contact due to his round-the-world trip - had knowledge of the impending closure.
Mr McMullan says he can soon find out because that his employee "carries a phone - he's contactable".
The closure of the RHI scheme was announced in February 2016 and Fergal Hegarty contacted DETI to say it would have "very, very serious implications" for biomass boiler firms that had stockpiled the machines.
Civil servant Seamus Hughes confirmed the closure, telling him that it was a "dire situation".
Image source, RHI InquiryMr Hegarty wrote back to say the the department and the minister couldn't leave companies "out to dry with a basic overnight closure of the scheme".
He instructed his colleagues at Alternative Heat Ltd that they should contact Green Party MLA Steven Agnew and the then chair of Stormont's Enterprise Committee Patsy McGlone.
Connel McMullan wrote to members of the committee as well as the enterprise minister Jonathan Bell to tell them of his concerns.
Fergal Hegarty tried to get information from DETI about a definitive date for the introduction of cost controls to the RHI scheme.
The department's Stuart Wightman - who was managing the day-to-day running of the initiative - provided the details of what was planned, including that the subsidies would be reduced.
Image source, RHI InquiryBut Connel McMullan says that even though the scheme would become less lucrative that it had been it was still attractive and worthwhile.
He says he was "glad" that the changes were being made because that increased the sustainability of the scheme and led him to hope that it was "going to run for longer".
David Scoffield QC (below) says the inquiry is "interested" in obtaining evidence from Alternative Heat Ltd's Fergal Hegarty, who did most of the company's contact with DETI officials about the changes to the RHI scheme.
But it's not been able to do that because he's been travelling the world for much of the past year.
Mr Hegarty co-ordinated efforts by boiler installation companies that Alternative Heat Ltd supplied to push for a delay in the introduction of a reduced subsidy in the autumn of 2015.
Image source, RHI InquiryAsked if Mr Hegarty's still being paid by the company, Connel McMullan says: "No, he's on leave."
Asked if Mr Hegarty's globetrotting, which has included visits to Africa, South America and Australia, has anything to do with the inquiry's interest in him, his boss says: "Not on my understanding, no."
He adds that Mr Hegarty is due to return to work at the company "end of this year, start of next year".
Connel McMullan's company was in regular contact with civil servants who were directly involved in the running of the RHI scheme, asking questions to try to verify rumours about what was happening with the initiative 2015.
He says his firm never experienced any resistance from the officials to answering the questions that were put to them.
Image source, Getty ImagesAlternative Heat Ltd's business development manager Fergal Hegarty did much of that contact, speaking to DETI's Stuart Wightman and Seamus Hughes.
Mr Hegarty found out from them that the scheme was running over its budget and that DETI was planning to add cost controls to it in the autumn of that year.
That information was passed on to Alternative Heat Ltd's trade partners and quickly spread through the renewable heat industry.
Between September 2013 to February 2016, Alternative Heat Ltd supplied 610 biomass boilers to the Northern Ireland market, of which 386 came in the last year of the RHI scheme's existence.
Since then it's supplied "next to nil" in Northern Ireland, says Connel McMullan, which "comes as no surprise".
Image source, Getty ImagesIn the 2015-16 financial year, sales doubled due to the impending cuts to the generous subsidies in the energy initiative - the witness says it was a "strong year" for his firm.
Asked if he would trade that bumper year to have the a sustainable version of the RHI scheme still running in Northern Ireland with much lower subsidies on offer, his answer is: "Certainly, without a doubt."
Some biomass boiler firms produced leaflets that marketed their products through the RHI scheme using slogans such as "cash for ash" and "burn to earn".
One company - Solmatix - distributed such leaflets in May 2015 that used those eye-catching slogans and outlined examples of the kind of payments that a client could expect to receive.
Connel McMullan's company supplied boilers to Solmatix but he says surprised to see the leaflet when it's presented to him at the inquiry.
Image source, Getty ImagesThat's because what the leaflet was suggesting "goes against the grain" of what the scheme was supposed to be about.
"'Cash for ash' would insinuate a scheme that's paying you to burn fuel," he says and it "doesn't help the industry we're in" to encourage irresponsible use of energy.
Asked whether he ever challenged Solmatix on its use of the slogan, Mr McMullan says it wasn't for him to tell others how to run their business.
Inquiry chair Sir Patrick Coghlin tells him: "Commerce doesn't recognise things like the use of public money for purposes that are not intended... the main thing is the money making for you and your partners."
People who considering installing renewable heating systems expected to have "payback" on the full cost of their capital costs - if they couldn't expect that to get that within a handful of years they wouldn't bother, says Connel McMullan.
"For me it's an industry that's tarnished with the payback, that's overlooked all fossil fuel alternatives," he adds.
Image source, RHI Inquiry"With the renewable industry, unless the payback is as lucrative as possible it can be a hard alternative to sell," he adds.
"When it comes to renewables the expectation has grown that there should be some form of payment associated with it," comments inquiry panellist Dame Una O'Brien (above).
The incentive offered by the RHI scheme was "much stronger than it needed to be within the market," says the witness and as a result it was "quite an easy sell".
Connel McMullan says he didn't think the the lucrative subsidies for small boilers on the RHI scheme was a mistake by those who designed it.
He tells the inquiry that because a similar, already-existing incentive scheme was running in Great Britain to which officials could refer, he thought they knew what they were doing.
Image source, RHI Inquiry"I thought it was a structured approach to a scheme that was thought out."
He says the only reason he could see for the overgenerous offer was "to incentivise uptake" of renewable heating systems in the early days of the scheme and he believed the subsidies would be cut over time.
Connel McMullan is the managing director of Alternative Heat Ltd.
It's a renewable heat company based in Banbridge, having previous been situated in Castlewellan, both in County Down.
Image source, RHI InquiryThe majority of its work is done in Great Britain and involves large-scale commercial heating systems.
Mr McMullan takes the oath and his witness statement is available on the inquiry's website, external.
Image source, RHI InquiryThe Senate chamber fills up again with the panel, the legal teams and a new witness - biomass boiler installer Connel McMullan.
Want to watch the proceedings? Click play on the video at the top of the page.
Jayne McCormack
BBC News NI politics reporter
Officials who oversaw the disastrous RHI scheme were accused of knowing there were critical flaws in its design.
The claim was made by Alan Hegan, who runs a biomass boiler installation firm.
Image source, PacemakerHe said he raised his concerns with Stormont's enterprise department but "nobody wanted to hear it, nobody cared".
Any confidence that Northern Ireland's business community had in the Department for the Economy has been "absolutely eroded" by the RHI debacle due to the "shambolic" way it's been handled, he added.
The inquiry will return at 14:00 with a new witness - join us then.
Alan Hegan's business has "all but collapsed" and he expects that he might have to to close it within nine months.
After the RHI scheme closed, his firm had to focus on getting work in Great Britain but due to family reasons he's since had to abandon that and now he does servicing work on biomass boilers.
The big problems his company is facing "mirrors the rest of the installation industry".
Image source, RHI Inquiry"There's not one biomass boiler that has been installed in Northern Ireland in this past two years," says the witness, explaining that it's due to a combination of the lack of an incentive on offer and the "negative stigma" attached to renewable heat in the wake of the RHI scandal.
He knows of one renewable heat firm that closed its doors last week and he doesn't see a future for his industry.
"I really hope I'm not sitting here in five years' time again at another inquiry when we're trying to assess why renewable heat has absolutely collapsed in Northern Ireland."
In stark contrast to what had happened the previous summer, there was no warning given to the renewable heat sector that the RHI scheme was to close in February 2016, Alan Hegan says.
The news of the impending closure came as a big shock, he says, and several clients threatened to sue him if their installations were not completed before the deadline.
Image source, PAHe lobbied two MLAs in his Mid Ulster constituency - Sinn Féin's Michelle O'Neill (above) and the Ulster Unionist Sandra Overend - for a two-week extension to the closure date in order for him to finish outstanding jobs.
The inquiry has heard that Sinn Féin and the DUP agreed the two-week delay between them.
Mr Hegan says that had that not happened boiler installers "would've been in serious trouble financially" and they would've had to make a legal challenge against the decision.
Faith in Stormont's economy department "has been completely eroded" in the business community, according to Alan Hegan.
He says the department has "shattered" businesses' cash flows as a result of changes that were made last year to the subsidies offered by the scheme.
"A large majority of people that I have spoke to that own a business or run a business think what has happened is absolutely disgraceful.
"Whatever opinion they had of the department before that, they certainly have a lower opinion of it now."
Northern Ireland's renewable heat industry is "dead" in the wake of the RHI scheme, says Alan Hegan.
The massive spike in sales of biomass boilers in 2015 "propelled" Hegan Biomass Ltd and its turnover for the entire year "was largely taken up" during that time, he says.
Image source, Getty ImagesThat boom led the firm to take on eight new staff and 20 more self-employed subcontractors.
But as a result of the "bad press" that surrounds biomass no amount of incentive would encourage people to make an investment in it.
"It's arguable whether even in five years, 10 years' time [the industry] is going to be saved," he adds.