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Renewable Heat Incentive (RHI) Scheme
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 UK Government expects the RHI to make a significant contribution towards their 2020 ambition of having 12 per cent of heating coming from renewable sources. The Renewable Heat Incentive is the first of its kind in the world.
There are two phases to the introduction of the RHI:
- Phase 1: the introduction of the RHI for non-domestic installations in the industrial, business and public sectors.
- Phase 2: the domestic element of the RHI, is expected to be introduced in spring 2014 following the consultation published in September 2012 and more recently the UK Government Heat Strategy.
Phase 1 – Non-domestic RHI scheme
Phase 1 of the RHI provides financial incentives to eligible, non-domestic renewable heat generators and producers of biomethane, for the life of the installations or up to a maximum of 20 years.
Non-domestic sectors include industrial, commercial, public and non-for-profit sectors. A non-domestic installation might be a large-scale industrial heating systems or a smaller community heating project.
Ofgem is responsible for administering the scheme.
Phase 2 – Domestic RHI scheme
The UK Government published its consultation on domestic RHI in September 2012. The key proposals in the consultation are:
- Indicative tariff ranges for air source heat pumps (6.9-11.5p/kWh), biomass boilers (5.2-8.7p/kWh), ground source heat pumps (12.5-17.3p/kWh) and solar thermal technologies (17.3p/kWh) that are MCS certified and meet relevant required standards, including specific emission limits for biomass systems.
- Payments for householders over seven years for each kWh of heat produced for the expected lifetime of the renewable technology and based on deemed heat usage.
- Tariff levels set to provide a better return for householders living off the gas grid.
- Minimum energy efficiency requirements based on Green Deal assessments.
The UK government has also confirmed that people who have installed equipment under RHPP 1 or 2 will be eligible for support through the RHI providing they meet the eligibility criteria of the full RHI scheme. In addition, the UK government are proposing that consumers who installed a renewable heat installation since 15 July 2009 will be eligible to apply for the domestic RHI provided they:
- have installed an eligible technology
- meet the eligibility criteria on energy efficiency. Except in very limited circumstances, this will involve getting a Green Deal assessment and, in some cases, installing some additional energy efficiency measures
- declare any government funding or support already received for the installation of renewable heat
- do not have a back up fossil fuel heating system, or if they do, are prepared or have installed a heat usage meter on which the RHI payments can be based
- meet all current MCS standards. In particular, for air-source heat pumps this includes evidence of either planning consent, or that when applied retrospectively, that the installation complies with the PDR (Permitted Development Rights) procedures in the MCS system.
On Tuesday 26th March 2013, the Department of Energy and Climate Change announced an extension to the Renewable Heat Premium Payment (RHPP) scheme.
It is very important that vouchers already issued by the Energy Saving Trust (EST) for the RHPP Phase 2 household scheme are redeemed by Friday 5 April 2013 as this is the date of expiration. Renewable equipment must be commissioned by 31 March 2013 at the latest.
If you currently hold a voucher, it will expire on 31st March 2013. You can apply for a new one from 1 April 2013 when EST will begin issuing vouchers under the householder scheme extension.
Social Landlords and Community groups benefitting from RHPP Phase 2 funding need to comply with the deadlines they have agreed with EST.
What is the Renewable Heat Premium?
On 21 July 2011, DECC published more details on the Renewable Heat Premium Payment scheme, which will in the short term provide support for installation of renewable heat technologies in the household sector.
The scheme will run in Great Britain and focus on houses not heated by mains gas. Those homes will be able to apply for grants for air-source and ground source heat pumps, biomass boilers and solar thermal. All eligible householders can apply for grants for solar thermal. There are minimum energy efficiency criteria, and householders must agree to monitor the performance of their heating system through a survey. In addition, the Government will pay for a significant sample of homes to receive meters to monitor their energy use.
This phase of the scheme ran until 31st March 2012. Regardless of when customers applied for or received their voucher, and in order to be eligible to receive their grant, all completed claims should have arrived at the address printed on the voucher (Energy Saving Trust, Edinburgh) before midnight on 31st March 2012 in order to be eligible for payment. This part of the scheme has now expired and moved on to Phase 2, please see below.
On 26 March, DECC announced a second phase to the Renewable Heat Premium Payment scheme, which will provide further short term support for installations of renewable heat technologies in the household sector.
Phase 2 consists of three elements:
1. Voucher Scheme
Under the new voucher scheme, homes not heated by mains gas will be able to apply for grants for air-to-water-source and ground and water source heat pumps, biomass boilers and solar thermal. All householders can apply for grants for solar thermal. There are minimum energy efficiency criteria, and householders must agree to complete customer questionnaires, as well as making provision for the installation of a meter to monitor their energy use and performance of their heating system.
Further information on the scheme can be found on the EST website [External link]or by calling the Energy Saving Trust on 0800 512012.
The Energy Saving Trust website also has weekly statistics and information on how popular the scheme has been in each region:
- Energy Saving Trust: Renewable Heat Premium Payment Scheme weekly statistics [External link]
- Energy Saving Trust: Regional statistics for the Renewable Heat Premium Payment scheme [External link]
2. Social Landlords Competition
The scheme aims to encourage uptake of and capture information from domestic renewable heat installations in social housing.
3. Communities Scheme
This scheme is a new and innovative funding mechanism to assist communities in England, Wales and Scotland to support domestic renewable heat installations in privately owned homes.
More information can be found here: