RHI

The UK Government has made a commitment to achieve their ambition of having 12% of its heating coming from renewable sources. This is clearly a massive undertaking and so have devised the Renewable Heat Incentive (RHI) to encourage uptake of renewable heat technologies among householders, communities and businesses. 

There have been two phases to the Renewable Heat Incentive:

1. This saw the introduction of the RHI for non-domestic installations in the industrial, business and public sectors. Check out Ofgem's website for more information.
2. The second phase of the introduction of the RHI was for domestic installations and was announced in September 2012. The key points of the domestic RHI are as follows:

• Tariff rates for Air Source Heat Pumps range from 6.9p - 11.5p/kWh. 
• The installation has to be undertaken by an accredited MCS installer and the product itself must be MCS accredited.
• Payments for householders over seven years for each kWh of heat produced for the expected lifetime of the heat pump and based on deemed heat usage.
• Households that are not on the gas grid will see better returns than those that are.

Renewable Heat Incentive FAQ's

Understanding the fundamentals of the Renewable Heat Incentive may seem a little daunting so we have prepared a selection of frequently asked questions that should cover most of your queries. If after reading through these you still have queries please do not hestitate to contact us for further explanations.

When is the Renewable Heat Incentive going to be active?

The Government launched a consultation on it's proposals for the domestic RHI in September 2012 which is due to close in December 2012. Final proposals are expected by April 2013 with a view to the scheme becoming active in the summer of 2013.

Do I have to improve the performance of my home?

The current proposal for eligibility for the Renewable Heat Incentive is that the household will have to undergone a Green Deal Advice Report for the property that wil propose heat saving measures. These proposals must have been installed prior to the application but are fully fundable under the Green Deal. For example, if the report suggests that you should install loft insulation and low energy light bulbs, then these measures will have to have been installed prior to the application for the Renewable Heat Incentive.

How will Renewable Heat Incentive payments be calculated?

In most cases the useful annual output of the heating system will be estimated in kilowatt hours per year and the owner of the system will then be paid the relevant tariff for each kilowatt hour (kWh) for the first seven years. For example, if the deemed heating requirement is 15,000 kWh per year, and the tariff is 6 p/kWh, then the householder will receive 15,000 x 6 pence per year = £900 per year, or £6,300 in total.

In some other cases the heat output will be metered. In this case then the householder will be paid according to the metered heat use provided this is no greater than the deemed heat use. So in the example above, if the meter showed 13,970 kWh in year one and 15,143 kWh in year two, they would be paid for 13,970 kWh in year one and for 15,000 kWh in year two.