The Renewable Heat Incentive (RHI)

The Renewable Heat Incentive (RHI) is a new payment scheme, similar to the Feed-in Tariff, being introduced in the UK for generating heat from renewable sources.  The Renewable Heat Incentive is payable to anyone who has a renewable heat systems installed by an MSC Accredited Installer – homeowners, tenants, businesses, schools, hospitals, farmers or landlords.   The new Coalition Government confirmed its support for the RHI in the October 2010 Spending Review.

Eligible systems
As an MSC Accredited Installer, a Sun Harvester solar panel hot water system is eligible to receive the Renewable Heat Incentive.

Renewable Heat Incentive Scheme details

The scheme will be introduced in two phases.
In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users – the industrial, business and public sector – which contribute 38% of the UK’s carbon emissions. Under this phase there will also be support of around £15 million for households through the Renewable Heat Premium Payment.
The second phase of the RHI scheme will see households moved to the same form of long-term tariff support offered to the non-domestic sector in the first phase. This transition will be timed to align with the Green Deal which is intended to be introduced in October 2012.

RHI tariff scheme: industry, commercial and public sector

• This is a new market for the UK. The RHI tariff scheme, which we will shortly be asking Parliament to approve, will stand alongside the Renewables Obligation and Feed in Tariff scheme to send a strong signal of support to the renewables sector.

• Anything from a pub to a public library, a school to a power plant will be eligible under the RHI to install technologies like biomass boilers, heat pumps and solar thermal. Community projects will also be eligible, provided a single installation is providing heat to more than one house.

• The tariffs will be paid to eligible technologies that have been installed since 15th July 2009 with payments being made for each kWh of renewable heat which is produced.

• Once in the scheme the proposed level of support an installation will receive is fixed and adjusted annually with inflation. However, as with feed in tariffs, we expect the levels of support available for new entrants to the RHI scheme will decrease over time as the costs of the equipment and installation reduce through economies of scale.

Initial Non-Domestic Tariff Levels:

Key aspects of the non-domestic sector

• RHI payments to be claimed by, and paid to, the owner of the heat installation or producers of biomethane for injection
• Payments will be made quarterly over a 20 year period
• For small and medium-sized installations (up to and including 45kWth), both installers and equipment to be certified under the Microgeneration Certification Scheme (MCS) or equivalent standard, helping to ensure quality assurance and consumer protection
• Tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems, with additional compensation for certain technologies for an element of the non-financial cost
• Heat output to be metered and the support calculated from the amount of heat used for eligible purposes, multiplied by the tariff level
• Eligible non-domestic installations completed after 15 July 2009, but before the start of the RHI, will be eligible for support as if they had been installed on the date of its introduction
• The Gas and Electricity Market Authority (Ofgem) will administer the RHI including: dealing with applications; accrediting installations; making incentive payments to recipients; and monitoring compliance with the rules and conditions of the scheme

Key aspects of the domestic/household sector
Further details will be published shortly on the eligibility criteria for the Renewable Heat Premium, but will include the following principles:

• a fair spread of technologies across all regions of Great Britain
• monitoring to enable government, manufacturers, installers and consumers to better understand how to make sure ‘real life’ users get the most out of them, and to inform decisions on the tariff levels and other scheme parameters for phase 2
• a well insulated home based on its energy performance certificate
• a householder must agree to monitor and record performance
• A focus on people living off the gas grid, where fossil fuels like heating oil are both more expensive and have a higher carbon content

RHI premium payment: residential solar 

If you have a solar thermal system installed between May 2012 and March 2013 then you are entitled to claim the RHI Premium Payment.  It’s £300 per installation.  Please visit the Energy Savings Trust website for further details.

You do not automatically qualify for the RHI just because you have had the premium payment you will need to apply separately for the RHI when it is launched.

Source: www.decc.gov.uk