Renewable Heat Incentive

The Renewable Heat Incentive domestic scheme is highly anticipated by homeowners.

Yesterday DECC made proposals for the domestic scheme and put them to consultation, to be reviewed in December.

For the first time we can see both the qualifying criteria and the tariffs that will come out in “summer” 2013.

Qualifying criteria for Renewable Heat Incentive

  • Energy Efficiency criteria: households must have a Green Deal assessment and have actioned all ‘green ticks’ that Green Deal finance is available for.
  • Microgeneration Certification Scheme: All eligible householders must have had installation by MCS accredited installers. These are industry standards relating to the standard of kit and also to the quality of installation. DECC continues to work with industry on these standards to ensurethey re robust in achieving quality systems and consumer protection.
  • Air Quality and Biomass Sustainability: Air Quality and Biomass Sustainability criteria will apply as per the consultation on the non-domestic RHI which was published on 20 July.

For biomass the proposed tariff range is between 5.2 and 8.7p per kW for a deemed property. This means that the installations would not be metered.

For a typical 3/4 bedroom house requiring 15kW of heat at 5.2p would gain £7174 over a 7 year period. This is approximately similar to a straightforward installation of a pelleburn boiler or similar. At the higher rate of 8.7p the incentive would pay about £12000 over 7 years.

For a larger property needing 28kW the lower rate of 5.2p would generate £13392 and the higher rate would be £22406.<

For biomass there would be a fuel saving as pellets are currently cheaper than both oil and gas (for more information on comparative fuel costs please see the Biomass Energy Centre). Logs are cheaper again.

The proposed rate for solar thermal is 17.3p, in addition the additional fuel costs are zero. If you were adding 2 solar panels to a biomass installation the extra equipment and installation could cost between £2-2500. From this we estimate that the incentive would pay back £210 per year and save a further £70 or £80 a year on heating costs (e.g. oil at 6p per kWh). Although an installation may struggle to pay for itself over a 7 year period the technology will work for an estimated 20 years and is the cleanest (although least favourite of the UK government) of the renewable technologies.


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