Renewable Heat Incentive

By Katie Anderson on July 27th, 2011

The Renewable Heat Incentive (RHI) has been introduced by the Government as a means of offering homeowners, businesses and communities financial support if they switch to some form of renewable heating technology.

By encouraging people to invest in renewable heating alternatives, the RHI aims to increase heating generation from renewable energy sources to 12%.

By 2020 the Renewable Heat Incentive has the potential to save the UK up to 60 million tonnes of CO2. Currently heating accounts for around 47% of the country’s CO2 emissions and around 60% of consumers average domestic energy bills.

The first phase of the RHI kicks off with the RHI Premium Payment in July 2011, which will see up to 25,000 installations supported by a one-off renewable energy grant which helps people cover the purchase price of green heating systems. There is around £15 million available to householders in England, Scotland and Wales who install from 1 August 2011.

For those taking up the Premium, they will be able to apply for a RHI tariff – the second phase of the initiative – which went live in April 2014 for domestic customers, as will anyone who has had eligible equipment installed from July 2009.

The Renewable Heat Incentive – the first scheme of its kind in the world – has been designed to help cut the cost of energy bills by eliminating or reducing the need for expensive gas or oil.

The scheme has been developed by the Renewable Energy Association and is administered by energy regulator Ofgem.

10 Top Facts

1. A renewable heat system is any type of device which allows a property to generate central heating and water heating from a renewable source of energy, like the sun or air.

2. The RHI for businesses and communities will be open for applications on 30 September 2011 for eligible technologies that have been installed since 15 July 2009. The domestic scheme was launched on 9th April 2014.

3. It’s not just residential homeowners who can apply for financial support. Private and social landlords and homeowners who self-build will qualify for RHI payments too.

4. The Renewable Heat Incentive applies to heat installations of any size and will mainly focus on the 4 million households in Britain not heated by mains gas, who have to rely on higher carbon forms of heating.

5. A fixed amount per year will be paid to anyone who is using a renewable heating alternative, including heat pumps, biomass boilers and solar water heating technologies.

6. Payments will either be made on the exact amount of heat produced – which means you’ll need a meter fitted to your system – or on the amount of heat the installation is anticipated to provide. In this case payments will be based on an estimate.

7. DECC has stipulated that before applying for the RHI applicants will be required to have undertaken a Green Deal assessment. Where appropriate applicants will also need to ensure that they have cavity wall insulation; lofts must also be insulated to the minimum level (250mm).

8. You’ll need to have a well-insulated home based on its energy performance certificate to be eligible for the Premium Payment. Plus you must agree to give feedback on how the equipment performs to benefit from this renewable energy grant.

9. Payments made for each kWh of renewable heat produced. The tariff levels for residential installations have been confirmed and will be:

  • Solar thermal (evacuated tube and flate plate) – at least 19.2p/kWh
  • Ground source heat pump – 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

10. According to the Department of Energy and Climate Change (DECC) the following grants are available until April 2014 (when the RHI goes live) to help homeowners invest in renewable heating technologies via the Renewable Heat Premium Payment (RHPP):

A dedicated phone line and website has been set up to provide information to anyone interested in taking advantage of the RHI Premium Payment scheme. Call 0800 512 012 or visit the Energy Saving Trust.

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