What is the Renewable Heat Incentive (RHI)?

The Renewable Heat Incentive (RHI) is a UK Government scheme set up to encourage uptake of renewable heat technologies among householders, communities and businesses through the provision of financial incentives.

The scheme is intended to open for applications in Spring 2014 and will be administered by the energy regulator Ofgem with the purpose of supporting and rewarding businesses and households who move away from fossil fuels for heating their homes.

Working in a similar way to the Feed-in-Tariff for Solar Photovoltaic (Solar PV) systems, owners of biomass boilers, air and ground source heat pumps and solar thermal systems will be paid on each kilowatt hour (kWh) of renewable heat their installation generates, for seven years, idex linked,  tax-free.

The amount of money you can receive under the Renewable Heat Incentive will be dependent on a number of factors including:

Renewable technology installed (ground source heat pumps, air source heat pumps, solar thermal)
Deemed heat load (the amount of heat likely to be generated by the renewable energy heating system)

The government assumes a 20 year lifetime for renewable heat technologies and has factored in the lifetime (i.e. 20 year) costs of operating the renewable heat system into the tariff values which are paid over 7 years. So, in effect, you are paid for 20 years of operation within a 7 year period

 Current Proposed Tariffs: Air source heat pump Biomass Ground source heat pump Solar thermal
Tariff (p/kWh renewable heat) 7.3 12.2 18.8 19.2
  • for biomass the renewable heat generated will be based on an estimated figure of heat demand from an Energy Performance Certificate (EPC)
  • for heat pumps the renewable heat generated will be based on an estimate of the heat demand from an EPC combined with an estimate of the heat pump’s efficiency
  • for solar thermal systems the renewable heat generated will be based on the estimate of system performance completed as part of an Microgeneration Certification Scheme (MCS) installation
  • to help improve performance of renewable heating systems, there will be an extra incentive for applicants who install metering and monitoring service packages, of £230 per year for heat pumps and £200 per year for biomass boilers

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