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Renewable Heat Incentive (RHI) Scheme
RHI - What is it?
The Domestic RHI scheme is for home-owners and private and social landlords who want to install renewable heating systems in their homes in England, Wales and Scotland.
It will provide long term financial support for property owners who install renewable heating systems and is due to be launched by this Easter (2014). It will mark a milestone in energy efficiency as it will be the first time every building in the country will be able to take advantage of financial incentives to install renewable heat technologies.
In order to help businesses, installers and consumers to find out more about the domestic RHI scheme, the Department of Energy and Climate Change will be attending a series of events this spring/summer.
Property owners will receive quarterly payments for seven years to help cover the cost of installing a renewable heating system. The scheme applies to certain types of hot water and heating systems including air source heat pumps, biomass boilers, ground source heat pumps and solar thermal systems.
At the events, attendees will also be able to find out how the domestic RHI and the Green Deal will work together to ensure that all participants benefit from having a smarter, warmer home.
How much can I earn from the RHI?
The Renewable Heat Incentive is designed to cut the time it takes for households to recoup the initial costs involved in installing and maintaining a renewable heating system, and start saving you money overall.
On 12 July 2013 the government announced the level of tariffs for the RHI, these have since been confirmed in the Palace of Westminster .
|Type of heating system
||Tariff (p/kWh renewable heat)
|Air source heat pump
|Ground source heat pump
|Solar thermal (solar panels that heat water)
||19.2 or more
Table note: All paid quaterly for seven years.
Payments will be made on a quarterly basis for seven years. Any public grants previously received, including the Renewable Heat Premium Payment (RHPP), will be deducted to avoid people receiving a double subsidy. Tariffs will change annually in line with the Retail Price Index (RPI).
How much these rates represent in real terms will vary between householders and heating technologies. In order to know how much you could potentially earn, you will need to know how much heat your system will generate in a year, in kWh:
- 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 biomass the renewable heat generated will be based on an estimated figure of heat demand from anEnergy Performance Certificate (EPC)
- for solar thermal systems (solar panels that heat water rather than generate electricity) 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 the 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.
Air Source Heat Pump
Government estimated that for a semi-detached house off the gas grid in a rural location with a typical heat demand of 10,000 kWh/year, householders could receive about £500 a year in RHI payments for an ASHP. But the Energy Saving Trust (EST) says that incomes could be as high as £1,350 a year for houses best suited to the installation of an ASHP and Heat Pump Installations Ltd's own experience has shown a repayment as high as £2,914 a year can be achieved (dependant on the size of the property)!
Ground Source Heat Pump
And for GSHP, Government estimates that householders could make £1,400 a year from the RHI with an additional £120 of fuel and operating cost savings. The EST estimates the income to be higher, around £3,000 a year for houses best suited to the installation of a GSHP. Although it must be noted that the initial outlay for a Ground Source Heat Pump is considerably higher (approximately 3 times as much as an equivalent Air Source Heat Pump).
Government estimates that householders could make £1,300 a year from RHI with a biomass boiler and an additional £100 of fuel and operating cost savings.
The Solar Trade Association (STA) estimates that householders could earn between £1,150 to £3,250 over seven years with the RHI for solar thermal. This is based on the current methodology under the MCS that installers have to use but this is currently being revised. So these figures are likely to change. What the STA analysis shows is that for a household of two people, one could expect to make £1,350 over seven years from the RHI and a house with four people could look at making £2,350.
How can I apply for RHI?
Applicants will need to complete a Green Deal Assessment before submitting their application and must ensure they have met minimum loft (250mm) and cavity wall insulation requirements, where appropriate.
A Green Deal can help in paying for the upfront cost of these technologies.
All installations and installers must be MCS certified (or certified by an equivalent scheme). MCS certified installers are currently required to be members of the Renewable Energy Consumer Code, which is backed by the Trading Standards Institute.
For biomass systems, the system must also meet relevant standards such as limits on harmful emissions. However, legacy biomass installations, installed between 15 July 2009 and the launch of the scheme in spring 2014, will not need to meet the emissions limits requirement.
RHI will be administered by the energy industry regulator Ofgem, who have indicated that all "Legacy" systems will be entered into the scheme at a pre-designated SPF rate of 2.5 with the option available for their MCS installer the option to notify upgrades that would allow the homeowner to qualify for an SPF of up to 3.6, increasing their repayment amounts.
The RHI scheme only covers England, Wales and Scotland.
Renewable Heat Premium Payment (RHPP) Scheme - Ended
This Scheme has now ended in preparation for the launch of the RHI
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:
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: