Launched in Spring 2014, all households, businesses and communities can now claim the Renewable Heat Incentive (RHI) on their homes and properties if they have a renewable form of heating. The scheme has been introduced in phases over the last few years and is now available to all. For many, this may be the first time you have even heard of the scheme and are now wondering if it could help you to afford to install a renewable source of energy into your home or business.
What is the RHI?
Essentially, the RHI is a feed-in-tariff for renewable sources of energy. The UK currently has the feed-in-tariff for electricity sources such as solar panels and wind turbines, but the RHI provides similar payments for those producing energy in the form of heat. The main difference is that the RHI is paid directly from the Treasury and is not added to the energy bills of regular energy users. Additionally, excess energy cannot be sold back to the grid as feed-in-tariff users are able to.
There are two main types of the RHI. Domestic and non-domestic. The non-domestic has been running for some time and the domestic scheme was introduced during the Spring of 2014. It is administered by Ofgem and this is where the payments will come from.
Most renewable heat sources are eligible for the RHI, however there are currently some restrictions and some additions may be made as time goes on. The following are currently eligible:
• Biomass boilers
• Biomass plants using Municipal Solid waste)
• Biogas (up to 200kWth)
• Ground source heat pumps
• Air source heat pumps
• Solar thermal (up to 200kWth)
• Water source heat pumps
Cooker stoves, provided they are attached to a boiler system and not used primarily for cooking, are due to be included from April 2015, following consultation on the issue. High temperature heat pumps will also be allowed.
The RHI is able to be used by homeowners, social and private landlords and self builders. it generally applies to single dwellings, but in April 2015, it will be able to be used for buildings that are used for commercial purposes. these need to be applied for under the non-domestic scheme..
The system needs to have been installed by a certified installer on or after 15th July 2009 and needs to be entirely new.
How much will I make?
The RHI offers between 7.3p and 19.2p per kWh for domestic users as at August 2014. These payments will also be enhanced by the reduction in energy bills in your home.
The government has estimated that a semi detached home which currently does not have access to gas could gain £500 in RHI payments annually with an air source pump, £1300 per year with a biomass boiler and £1400 per year with a ground source heat pump.
The application process
- Decide what type of renewable heat you would like to have installed. You should talk to installers and do your own research to work out what will work best for your home and what will offer you the best combination of reduced bills and RHI payments.
- You will need to have a Green Deal assessment carried out on your home. This will ensure that your home will make the most of the installation. You may need to have insulation installed to meet the minimum energy rating criteria. New built homes which incorporate renewable heat sources will be exempt as they should already meet these minimum standards.
- You will receive an updated EPC to show Ofgem when you make your application.
- Have your system installed under the Microgeneration Certification Scheme by an installer who is certified.
- Make your application with Ofgem supplying the EPC and MCS details as well as your bank account number for the payments to be made into. Ofgem may require other detailed information on your particular renewable heat system.
What if I have already installed my system?
The ability to apply for your RHI will depend on how long you have had your system installed. Once the RHI is open to all domestic households, the application process will be staggered.
Months 1-3: new applications and old applications which were not part funded by the Renewable Heat Premium Payment (RHPP)
Months 3-6: As above plus older applications installed before 20th May 2013 (part funded by RHPP)
Months 6-12: All applications – old and new
From 2 years into the scheme, only new applications will be accepted, as long as the application is made within one year of the installation.