What is the Renewable Heating Incentive (RHI)?

What Exactly is the Renewable Heating Incentive?

Exciting News!

Offgem recently published an article on their webite (www.ofgem.gov.uk) that all over England, Scotland, and Wales we hit a major milestone on 29/09/14: 10,000 accreditations for the Domestic Renewable Heat Incentive (RHI) in less than six months of the scheme being opened. The facts speak for themselves really, more and more people turn to wanting to use renewable energy. Let me start by explaining about what the Renewable Heat Incentive (RHI) is and how you could benefit from it.

Biomass Renewable Energy Boilers

We have discussed the Renewable Heating Incentive before but the key recent change is that since April 2014 it is possible for domestic users to get paid for using Biomass Renewable Energy. (Previously there was just grants available to part fund the installation of biomass boilers)

The RHI is the worlds’ first long-term government financial support programme for renewable heat. It was first introduced in 2011 to promote the use of renewable heat by paying installation grants to participants of the scheme. Switching to heating systems that use naturally replenished energy can not only help the UK reduce its carbon emissions but also saves money on our heating bills. The Renewable Heat Incentive applies both to heat (from low carbon sources) and to biomethane fed into the gas grid.  In addition, you get continuous payments for the next seven years for using renewable energy. With the rising cost in fuel bills each year it sounds like a no-brainer to me!

The Renewable Heat Incentive has two schemes – Domestic and Non-Domestic and is open to anyone who can meet the joining requirements. It’s for households both off and on the gas grid. People off mains gas have the most potential to save on fuel bills and reduce carbon emissions.

  1. Domestic RHI – launched 9 April 2014 and open to homeowners, private landlords, social landlords and self-builders. The key to joining is that the renewable heating system heats only a single property that can get a domestic Energy Performance Certificate (EPC). The EPC is the proof that your property is assessed as a domestic ‘dwelling’. An EPC gives information about a property’s energy use, plus recommendations on how to reduce energy and save money.
  2. Non-domestic RHI – launched in November 2011 to provide payments to industry, businesses and public sector organizations. Generally, if the renewable heating system is in commercial, public or industrial premises, then you would apply to the Non Domestic RHI. This can include small and large businesses, hospitals, schools, and organisations with district heating schemes where one heating system serves multiple homes.

Now to the good bit; save money and get paid for using renewable energy! People who join the domestic RHI scheme receive ongoing payments for seven years for the amount of clean, green renewable heat their system produces. The ongoing payments are calculated multiplying a tariff with the heat demand/use in your home. The current tariff rates in pence per kilo watt hour (p/kWh) are as follows (a);

* Biomass – 12.2 p/kWh
* Air Source Heat Pump -7.3 p/kWh
* Ground Source 19.2 p/kWh

Special Note:
The domestic rates are reviewed every quarter. It is already suggested that the domestic RHI for biomass will start to drop by as much as 10 percent by January 2015. (This is similar to what happened with the Feed In Tariff (FIT) for solar pv panels) So clearly acting sooner rather than later to claim the RHI would be advantageous.

It’s easier than most people think to get started with renewable energy in your home or business. At Wood Pellet Solutions we can assist you with choosing the right energy options allowing you to maximise your financial return from the RHI. Contact Us for further information.

Contact Us Today for further information or quotation or Phone 01225 580401

(a) Example of domestic tariff rates taken from the Ofgem Website, www.ofgem.gov.uk