Renewable Heat Incentive - RHI

The RHI's are effectively a 'feed-in-tariff' for renewable heat technologies, rewarding those who install eligible renewable heat systems via a generation tariff. LATEST: Oct 26th - the Government has just announced they hope the commercial sector RHI will start at the end of NOV..

STOP PRESS - RHI update - 26 October 2011 for Commercial applications

DECC was planning to launch the Renewable Heat Incentive (RHI) for non-domestic generators on 30 September 2011. State aid approval is a necessary condition for the scheme to go ahead. As part of that process, the European Commission expressed concerns that the large biomass tariff was set too high.

The Commission has now given State Aid approval to the RHI subject to the large biomass tariff being reduced from 2.7p per kWH to 1p per kWH. Revised regulations have now been re-laid in Parliament to reflect the required amendment to the tariff for large scale biomass. They hope to open the scheme to applications by the end of November 2011, subject to Parliamentary approval.

 

                                                       

 

 

Residential and non-residential systems are being treated separately
Support for residential installations doesn't start until October 2012, though there will be a so-called "RHI Premium Payment" - which is like a capital grant for systems installed before then. * see below for details

Support for industry, commercial and public sector (non-residential) installations will now begin in NOv 2011 - see  statement above.

Not all technologies are supported
The scheme will support biomass (including MSW) heat, geothermal and ground source heat and biogas and solar thermal below 200kW. It also supports biogas injection as originally proposed.
It will not initially support air-source heat pumps, bioliquids, biogas and solar thermal above 200kW nor waste (apart from MSW). These may be introduced later.

Some tariff levels published
The tariff levels have been published only for non-residential systems - and many have changed from the initial proposals.
The tariffs have been calculated to give a 12% return on investment, except for solar thermal where the figure is much lower (probably about 5%).

All tariffs will now run for 20 years
As for the Feed-In Tariffs, tariff levels will be index-linked to the RPI and degression will be applied for future installations.
Systems installed since July 2009 will be able to start claiming tariffs from the appropriate registration date.

Tariffs will be paid by Ofgem from government funds
The scheme will be administered by energy regulator Ofgem, who will make tariff payments quarterly. They should publish guidelines shortly. .

                               --------------------------------------------------------------------------------------

 

*The 'Renewable Heat Premium Payment'
This is an interim scheme to support renewable heat installations before the RHI starts for residential installations in 2012

What is it?
It's like a grant for household renewable heat installations installed after August 2011 and before March 2012 (the household RHI doesn't start until probably October 2012).

How much?
The following levels apply to each installation irrespective of size:
Heat Technology                              Payment per installation
Air source heat pumps                  £850
Biomass boilers                                £950
Ground source heat pumps         £1,250
Solar water heating                        £300

Premium Payment levels
A total of just £15m is available for this scheme.

Will everyone be eligible?
No!  Except for solar thermal, which is available to any householder, other technologies are only available for households not currently using gas heating.
Householders in England, Scotland and Wales can apply. They must certify that this is their main home and that they have basic energy efficiency measures in place (loft insulation to 250mm and cavity wall insulation, where appropriate).
Both the product and installer must be MCS (or equivalent) certified.

Note also that receiving a Renewable Heat Premium Payment does not automatically mean you'll be eligible for RHI tariff payments.

Timetable and applications
The scheme starts 1 August and closes 31 March 2012.
Householders  can request the RHPP in advance, and  once registered, receive a voucher for the relevant amount. They must install the renewable heat system within 3 months for solar thermal and 6 months for all the others. Installations must have been completed by 31 March 2012.

Other requirements
Participants must complete 2 surveys.
Some households will also be selected at random to provide further information via meter installations. Agreeing to this if selected is a condition of the scheme - the meters will be installed free of charge.