Renewable Heat Incentive for Solar Thermal, Ground Source Heat Pumps, Air Source Heat Pumps and Biomass Boilers

The Renewable Heat Incentive (RHI) has been developed by the Renewable Energy Association (REA) to provide financial support to encourage homeowners, businesses and communities to switch to renewable heating technology.

Evacuated Tube Solar Hot Water

The aim of the incentive is to increase heating generation from renewable energy sources to 12 per cent which could potentially save up to 60 million tonnes of CO2 by 2020.

Heating currently accounts for 47 per cent of the UK’s CO2 emissions and 60 per cent of average domestic energy bills.

The Renewable Heat Incentive went live in April 2014. It will be open to homeowners, social and private landlords and self-builders. New installations and systems installed since 15 July 2009 will be eligible as long as they meet the criteria.

Prior to the introduction of the main incentive, householders could apply for a one-off payment to install qualifying technologies called the Renewable Heat Premium Payment (RHPP). The scheme closed at the end of March 2014.

What’s the purpose of it?

The aim of the RHI is to offer the first comprehensive framework of support for renewable heat in the UK. The REA has put forward the scheme to encourage individuals to switch to renewable heat alternatives as heat is the biggest use of energy in the UK, and is mainly supplied by fossil gas. And heat also accounts for 47 per cent of the UK’s CO2 emissions.

The UK is in fact has one of the lowest contributions of renewable heat of all EU countries. The likes of Sweden produces half of its heat through renewable and the EU average is over 10 per cent.

So to counteract the UK’s shortfall in renewable heat energy, the RHI is offering a long-term stable framework of tariffs to inspire confidence in consumers to deflect to renewable and drag the technology into the mainstream for all types of heating requirements.

How will it work?

The RHI will pay a fixed amount per year to those who opt to change from heating systems operated by fossil fuels to renewable options such as solar thermal panels, biomass boilers, ground source heat pumps and air source heat pumps.

The payments made will either be made on the exact amount of heat produced or on the amount it is anticipated the installation will provide. The former means you’ll need to have a meter fitted to your system, in the same way as gas and electricity is metered, to account for the heat produced while the latter is paid on an estimate.

And unlike the Feed-in Tariffs which limits payments to installations with a maximum of 5MW, the RHI will apply to heat installations of any size.

The Government has confirmed that payments will be made on a quarterly basis over seven years. The following tariff rates for the domestic RHI apply:

Solar thermal panels (flat plate and evacuated tube) 19.2p/kWh
Ground source heat pumps 18.8p/kWh
Biomass boilers and biomass pellet stoves with a back boiler 12.2p/kWh
Air source heat pumps (air-to-water) 7.3p/kWh

Households with biomass boilers and heat pumps who install a metering and monitoring package will also receive additional payments per annum of £200 and £230 respectively.

To be eligible for RHI payments you will be required to have a Green Deal assessment and where appropriate have cavity wall insulation and a loft insulated to a minimum of 250mm. If you have a biomass system the installation will need to adhere to fuel sustainability and air quality requirements.

What are the benefits?

  • The first benefit will be a cut in the cost of your energy bills. Renewable heat production means you’ll get paid for the heat you generate. Even the additional costs of powering your system (e.g. electricity to power a heat pump) will be far less than or roughly the same as the payment you receive from the RHI. In fact, the REA is predicting a £600 net profit for the average homeowner.
  • By generating your own renewable heat you won’t be relying on either gas or oil – both of which the price has fluctuated a lot in recent years. You’ll still be affected as the systems rely on electricity or other fuel to run, but you won’t feel the brunt of the changes like you would with a conventional heating system.
  • A grand total of just one single per cent of heat currently generated in the UK comes from renewable – that means 99 per cent is generated from oil, gas fuel or electricity power stations. The aim of the RHI is to improve the renewable count to 12 per cent to reduce the CO2 emissions of the country.

Which technologies are eligible?

The following all qualify for the RHI:

  • Air, water and ground-source heat pumps
  • Solar thermal
  • Biomass boilers
  • Renewable combined heat and power
  • Use of biogas and bioliquids
  • Injection or biomethane into the natural gas grid