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Renewable Heat Incentive (RHI)

The Renewable Heat Incentive is a government payment scheme designed to encourage people to invest in systems which generate heat from renewable sources


The aim of the Renewable Heat Incentive (RHI), which launched in April 2014, is to increase the amount of heat generated by renewable technologies such as biomass boilers, solar thermal panels and heat pumps by paying a subsidy to people installing these kinds of heating systems.

The scheme applies to both domestic systems (e.g. in homes) and non-domestic (offices, factories, village halls etc), though the details vary somewhat between them. This page is an introduction to the domestic RHI.

[NB In addition to RHI, there was a one-off grant called the Renewable Heat Premium Payment to help householders with the cost of installing a domestic renewable heat technology. This closed on 31 March 2014.]

Householders who have installed an eligible renewable energy system since 15 July 2009 can claim RHI payments for every unit of heat generated. The payments are made quarterly, over a seven year period. The amount you are paid will depend on:

  • the type and (in some cases) the size of the system you’ve installed
  • the amount of heat your system generates, measured in kilowatt-hours

Which technologies and fuels are eligible?

There are various heating systems that you could install in your home that qualify for the RHI. These provide either heating, or domestic hot water for the kitchen and bathroom. The three main ones are:

  1. Solar thermal. Solar thermal panels, which collect heat from the sun and use it to heat water which is stored in a hot water cylinder. Both evacuated tube panels and liquid-filled flat plate panels are eligible for the RHI. They are not the same as solar PV panels which generate electricity.
  2. Biomass boilers for burning solid biomass fuel and biomass stoves burning wood pellets to provide space heating and domestic hot water. 
  3. Ground-source heat pumps and air-to-water heat pumps. These extract the ‘latent heat’ from the ground or air and provide 'wet' space heating and hot water.

Air-to-air source heat pumps are not eligible for RHI payments.

(Eligible technologies for the non-domestic RHI include all of the above plus biogas, geothermal and energy-from-waste systems.)

Only one space heating system is allowed per property but homeowners can apply for solar thermal for hot water and a separate space heating system.

Whatever system you install, you won’t qualify for RHI unless you meet other eligibility criteria.The renewable heating system must be for a single home in a property that can get a domestic Energy Performance Certificate (EPC). This confirms that the property is a ‘domestic dwelling’ and without one, you won’t be able to apply. The EPC must be produced as part of a Green Deal Advice Report (GDAR). This needs to be completed before you can apply for RHI. If you've already had a Green Deal Assessment you won’t need to get a new one done as long as you have the GDAR number.

Loft and/or cavity wall insulation must be installed if they are recommended on the EPC. Loft insulation would be recommended on the EPC if the existing depth was less than 150mm. If recommended it would need to be installed to a minimum standard of 250mm. The only exemption is if you built your own new-build home. If it’s not possible to install loft or cavity wall insulation then there is an exemption process.

In all cases systems must have been installed by an accredited installer after 15 July 2009 to qualify. For certain renewable heat technologies rated below 45 kW, your installer should be Microgeneration Certification Scheme (or equivalent) accredited. Installers that are also members of the Renewable Energy Consumer Code scheme will have agreed to stand by a consumer code that covers contracts, completing the order and after-sales activities. If your installer is registered with a Competent Persons Scheme such as HETAS, your system will comply with all regulations; if not, your local council’s building control department will have to check and sign-off the installation.

You should visit Ofgem's domestic RHI website for more guidance on eligibility criteria .

How much will I be paid?

The table below (figures are correct as of April 2015) shows the proposed rates for the standard domestic renewable heat technologies. These payments are index-inked and will be calculated for a 20 year period (though people entering the scheme in future may receive less). The current proposal is that householders would receive these payments on a quarterly basis over the first seven years.

Technology

Payment per kilowatt hour (kWh)*

Biomass boilers**

8.9p

Ground source heat pumps

18.8p

Air-to-water heat pumps

7.3p

Solar thermal for hot water

19.2p

*Each quarter, the Department of Energy & Climate Change reviews the tariff rates. The rate for any of the four technologies can then be reduced by 10%. This may affect anyone applying for the RHI after the quarterly review.

**Biomass only boilers (providing heat via a wet central heating system, e.g. through radiators and providing hot water) and biomass pellet stoves with integrated boilers (providing heat for the room they are in directly, as well as providing heat to the rest of the home using a 'wet system' and providing hot water).

Here’s an example of how payment for a small solar thermal system would be calculated.

Let’s say you install a standard domestic solar hot water system. It will output around 1,720 kWh over the year. You will be paid 19.2p per kWh, which works out at 1,720 x 0.192 = £330.24 a year. The heat output may be metered, but is more likely to be ‘deemed’ (i.e. estimated according to the size of the system).

You can find out how much you could get by using this Renewable Heat Incentive calculator.

Things to think about and next steps

Even with the RHI payments, investing in a solar hot water system, a heat pump or biomass boiler isn’t a decision to be taken lightly, and it may not be worth your while – particularly if you currently heat your home with mains gas (which is cheap compared to oil or electricity). So when you do your calculations, remember to take any savings on fuel costs into account as well as the RHI payments. And bear in mind, too, that if you can combine the installation with works that you need to do anyway – e.g. installing solar panels at the same time as having your roof re-done – this could reduce the cost.

Other issues to consider are fuel storage (if you’re thinking of a biomass system), and whether or not you’ll need planning permission (which may involve additional costs).

And finally, the energy regulator Ofgem requires that recipients of RHI comply with various obligations throughout the lifetime of the scheme. This may include providing meter readings and undertaking regular system maintenance, and there may also be periodic inspections of the system.


Making an application

To find out more about the domestic Renewable Heat Incentive, to book a Green Deal Assessment call the Energy Saving Advice Service on 0300 123 1234 (England and Wales) or Home Energy Scotland on 0808 808 2282, or visit www.energysavingtrust.org.uk

If you are ready to apply to the domestic RHI visit https://domesticrhi.ofgem.gov.uk/apply

For the non-domestic applications contact the Ofgem RHI team on 0845 200 2122 or rhi.enquiry@ofgem.gov.uk


Photo: Adam Tomasik | iStock.com

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