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Renewable Heat Incentive (RHI)

What is the Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is a Government scheme that provides financial support to non-domestic renewable heat generators and producers of biomethane.

In its first phase, the RHI only applies to non-domestic systems. In the meantime there is a rebate scheme known as the Renewable Heat Premium Payment that is available for homeowners.

Renewable Heat Premium Payment (RHPP)

Phase 2 – Rewarding renewable heat on domestic installations

The Renewable Heat Premium Payment (RHPP) is a one-off grant to help you meet the cost of installing green heat-generating technologies within your home. It’s here in place of a domestic stream of the RHI, which is yet to be introduced.

Phase 2 of this scheme runs from May 1st 2012 to March 31st 2013 (subject to available funding) and includes £300 towards cost-saving Solar Thermal installations, which you can get through Southern Solar.

The RHPP is also available for heat pumps and biomass boilers.

Those who receive the RHPP will still be eligible for RHI funding when this comes in.

Am I eligible?

There are some eligibility criteria that it is useful to be aware of:

  • You must live in England, Scotland or Wales.
  • Your installation must not have received funding under phase 1 of the RHPP.
  • The installation must have been commissioned on 21st July 2011 onwards.
  • You must own the property and continue to own it for the duration of the metering and survey requirements; or
  • If you’re a tenant you must be purchasing the system yourself with permission from the owner of the property.
  • If the property is a new-build you must own it after it’s built as either the occupier or the landlord.
  • The property must have loft and cavity wall insulation (where practical).
  • Planning and environmental permission must be in place if needed.
  • The product used and the installer must be MCS or Solar Keymark certified.

Also, how you heat your home currently can make a difference:

  • If you’ve recently removed a gas heating system or if the property runs from mains gas heating – you are only able to apply for Solar Thermal RHPP.
  • You can apply for the other technologies if you run on oil, liquid gas, solid fuel or electricity.

When does the RHI launch?
The scheme opened for applications on Monday 28 November 2011.

What technologies are included in the scheme?

• Biomass boilers (Including CHP biomass boilers)
• Solar Thermal
• Ground Source Heat Pumps
• Water Source Heat Pumps
• On-Site Biogas combustion
• Deep Geothermal
• Energy from Municipal Solid Waste
• Injection of biomethane into the grid

Key principles of this policy/scheme:
The RHI provides a continuous income stream for twenty years to any organisation that installs an eligible renewable heating system, ensuring that renewable heat is commercially attractive when compared to fossil fuel alternatives. The RHI is important because it will help increase significantly the level of renewable heat produced in the UK, which is key to the UK meeting its renewable energy targets, reducing carbon emissions, ensuring energy security and helping to build a low carbon economy. The RHI will accelerate deployment by providing a financial incentive to generate heat from renewables instead of fossil fuels.

What is it trying to do?

The key objective of the scheme is to increase significantly the level of heat generated from renewable energy sources in Great Britain and thereby enable the UK to meet its binding targets to generate 15% of our energy from renewable sources by 2020.

The Government is committed to the ambition that by 2020, 12 per cent of heating can come from renewable sources.
The Government estimate that the RHI could save up to 44 million tonnes of carbon (MtCO2) by 2020 (and 7 MtCO2 inside the EU(ETS). This works out as a saving of one million tonnes of carbon in the first carbon budget period (2008-2012), 14 million tonnes in the second carbon budget period (2013-2017) and 52 million tonnes in the third budget period (2018-2022).

By 2020, they estimate the RHI support levels are expected to bring forwards around:

  • 14,000 installations in industry; and
  • 112,000 installations in the commercial and public sector.

These installations are expected to generate around 57TWh of renewable energy.

Are the government going to launch RHI for domestic installs?

YES, and they expect the RHI to deliver those too. But cannot give estimates of numbers as they have not determined how the RHI is going to operate for domestic installations.

Ahead of the introduction of support for domestic installations under Phase 2 of the RHI will be providing a simple one-off payment through the Renewable Heat Premium Payment scheme to cover part of the installation costs for domestic installations.

The level of support varies depending on the type and size of technology. In order to calculate support, the appropriate tariff is multiplied by the eligible heat used.

Eligible Technologies Tariff Table
The current tariff levels are shown in the following table:

Tariff Name Eligible Technology Eligible Sizes Tariff Rate (pence/kWh) Tariff Duration (Years) Support Calculation
Small Biomass Solid biomass; Municiple Solid Waste (inc. CHP) Less than 200kWth Tier 1: 8.3p 20 Metering Tier 1 applies annually up to the Tier Break, Tier 2 above the Tier Break.  The Tier Break is installed capacity x 1,314 peak load hours, i.e.: kWth x 1,134
Tier 2: 2.1p
Medium Biomass 200 kWth and above; less than 1000 kWth Tier 1: 5.1p
Tier 2: 2.1p
Large Biomass 1000 kWth and above 1.0p Metering
Small Ground Source Ground-source heat pumps; Water-source heat pumps; deep geothermal Less than 100 kWth 4.5p 20 Metering
Large Ground Source 100 kWth and above 3.2p 20
Solar Thermal Solar thermal Less than 200 kWth 8.5p 20 Metering
Biomethane Biomethane injection and biogas combustion, except from landfill gas Biomethand all scales, biogas combustion less than 200 kWh 6.8p 20