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RHI Tariff Announcement

After several delays, the details of the renewable heat incentive, originally announced in July 2010 have finally been announced. Its aim is to encourage the uptake of renewable heat technologies to cut carbon, help meet the renewables targets and to save money on energy bills.

Who can apply for domestic renewable heat incentive?

  • homeowners (including second homes),
  • private landlords
  • social landlords,
  • self-builders
  • legacy applicants, ie anyone who has installed a renewable heat technology since 15 July 2009 as long as they meet the scheme eligibility criteria and
  • third party owners of heating systems.

New build housing (other than self-build) is excluded.

RHI tariff rates

Renewable Heat Incentive - domestic tariff levels

Air source heat pumps (air to water) -7.3p/kWh

Biomass only boilers and biomass pellet stoves with back boilers - 12.2p/kWh

Ground source heat pump - 18.8/kWh

Solar thermal (flat plate and evacuated tube)  - 19.2-21.7p/kWh*

Extra payments will be on offer if you install a metering and monitoring package. These are 230/year for heat pumps, 200/year for biomass boilers.  

Who will benefit most?

The scheme is targeted at people living off the mains gas grid. This means that the tariff rates are calculated based on the costs of off-gas heating, which tend to be significantly more expensive than heating with mains gas. Those who currently use gas can change to renewable technologies and claim the renewable heat incentive, but they will not get such a good rate of return as those off-gas. It may not lead to a reduction in carbon emissions either.

How will the RHI payments work?

Payments will be made quarterly for seven years by Ofgem. The tariff rates have been set at a level that reflects the expected cost of renewable heat generation over 20 years for those off the mains gas network.

In most cases, payments will be made based on the estimated (deemed) heat demand of the property. Exceptions include those who retain a back up heating system, or applications for second homes, both of which must install metering systems. Payments will be based on meter readings of heat generated.

Those eligible for deeming can opt for a metering and monitoring package and receive additional payments to cover the costs of this (see table above). 

What do I have to do to claim the RHI

You must:

  • Complete a Green Deal Assessment before submitting your application. 
  • Ensure you have a minimum loft (250mm) and cavity wall insulation, where appropriate.
  • Use an MCS certified (or certified by an equivalent scheme) installer and product. The installer must also be a member of the Renewable Energy Consumer Code (RECC), which is backed by the Trading Standards Institute.
  • Biomass installations must also meet air quality and fuel sustainability requirements.

Is there any help with upfront costs of installation?

You may be able to get help with the upfront costs of the renewable heating installation under the Green Deal. Money off vouchers are also available under the RHPP scheme. NB: Any money received upfront through Renewable Heat Premium Payments will be deducted from future RHI payments to avoid a double subsidy.

*The solar thermal tariff is capped to what is assessed to be the marginal cost of renewable energy. It will be at least 19.2p/kWh, but may be more. DECC will publish the final solar thermal tariff in the Autumn.

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