The Renewable Heat Incentive (RHI) is a payment which comes from the government for households or businesses which generate heat through using renewable sources of energy. This is different to the feed-in-tariff which offers incentives for the generation of electricity through the use of solar panels.
The RHI will was launched in July 2011 and has run in two phases. The first phase involved a tariff for non-residential systems and the second phase started April 2014 and is a tariff for homeowners.
The RHI is administered by Ofgem who will pay those who use these systems with money from the treasury. As of August 2014, the payment is between 7.3p per kilowatt of energy produced and 19.2p. The amount depends on the type of renewable heating used.
The types of systems which are eligible under the scheme include biomass boilers, cooker stoves ( from 2015, as long as they are not used primarily for cooking and are attached to a boiler) deep geothermal, ground source heat pumps, solar thermal, high temperature heat pumps and air source heat pumps. Biomass and biogas installations have to use acceptable sources of fuel and solar and biogas installations must be below 200kW. The system must also have been installed after July 2009 and they must be new.
In addition to the tariff, homeowners can also expect to save money on their gas and oil and will reduce the carbon footprint of their home or business. The tariff will last for seven years from the registration date. It is thought that most installations will generate a return of around 12% per year and the system would be paid off within that time.
For most people the best idea if they wish to take advantage of the RHI is to ask an expert to take care of the installation. They will be able to decide which type of system will work best for the property involved and how to get the most money from the RHI.
Any installer which is used must be MCS certified and registered with the REAL code. Once the system is installed it is just a case of registering with the scheme. It is possible to register a system that was installed previously as long as it fits the criteria.