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Renewable Heat Incentive - Important Changes for 20 September 2017


On 30 August, amendments were made by the Department for Business, Energy and Industrial Strategy (BEIS) to the Renewable Heat Incentive (RHI), including increased tariffs and the introduction of heat demand limits for domestic heat pumps and biomass installations.

These amendments are part of the Domestic Renewable Heat Incentive Scheme (Amendment) (No.2) Regulations 2017.

Please click here for a factsheet detailing the important changes to the Domestic RHI scheme published by Ofgem.

Please click here for an overview of the Domestic RHI tariffs and payments published by Ofgem.

To view the full Statutory Instrument please click here

Renewable Heat Incentive: Now Available For Domestic Properties

The Domestic Renewable Heat Incentive (RHI) is what the Department of Energy & Climate Change (DECC) call the first step to transforming the way we heat our homes.

The government scheme provides financial support for renewable heat which targets primarily, but is not limited to, off gas grid households. The scheme supports the installation of air source heat pumps, biomass systems, ground source heat pumps and solar thermal technologies, and support is paid at a set rate per unit of renewable heat produced for seven years to the owner of the technology.

The tariffs available vary depending on the technology installed, and are paid in pence per kilowatt hour (p/kWh). The current tariffs available are 7.3p/kWh for air source heat pumps, 12.2p/kWh for biomass systems, 18.8p/kWh for ground source heat pumps, and 19.2p/kWh for solar thermal technologies.

All installations must be certified under the Microgeneration Certification Scheme (MCS) and the scheme will cover single domestic dwellings with eligible technology installed since 15th July 2009. New build properties other than self-build will not qualify for RHI.

Greg Barker, Minister of State (DECC), said in the government’s namesake publication “We have sought to develop a scheme that is sustainable and delivers renewable heat in the most cost-effective way, learning from past experience.”

An additional incentive is also available for applicants who install metering and monitoring service packages. This incentive currently stands at £230 per year for heat pumps and £200 per year for biomass boilers, and is similar to a service contract where the installer will be able to view measured data from their system over the internet. The intention is to encourage peace of mind in the customer that the technology is working as expected, and to enable the installer to improve performance and diagnose common problems.

Mr Barker continued: “Renewable energy and energy efficiency go hand in hand, which is why it is so important that the RHI works alongside the Green Deal. Renewable heating technologies work best in an energy efficient home, and reducing the size of the heating demand in each house means we can support more households through the RHI.”

Over time as threshold figures are reached, a system of degression will be introduced to control costs. This, put simply, is a reduction in tariffs, and further details will be announced in Autumn including whether an overall cap will be introduced

How The Renewable Heat Incentive (RHI) Can Benefit Your Business!

The Renewable Heat Incentive (RHI) was launched in November 2011 to reward the non-domestic sector for generating and using renewable energy to heat their premises. The scheme provides long-term financial support to industry, business and public sector organisations.

RHI is the main scheme of the governments heat strategy and will help the UK to reduce greenhouse gas emissions and will also contribute to the UK targets for reducing climate change.

There are many types of heating covered by the RHI, including biomass and heat pumps (ground and water source) and payments are made every three months and spread over 20 years. The amount you receive depends on the type of technology you install, the capacity of the equipment, and how much energy you use.

Renewable Heat Incentive (RHI) Examples:

  • Biomass

The tariff associated with small and medium biomass heaters is split over two tiers and based on the amount of energy used, similar to regular energy bills. Tier 1 offers payments for energy used up to a certain limit, and if you go over this limit the rest of the energy is paid at tier 2.

Small biomass with a capacity of less than 200 kWth will get you 8.3 pence per kWth at tier 1 or 2.1 pence per kWth at tier 2., whilst medium biomass that produce between 200 and 999 kWth will get you between 5.1 pence per kWth at tier 1 or 2.1 pence per kWth at tier 2.

Large biomass heaters have only one tier, and with a capacity in excess of 1000 kWth will get you 1.0 pence per kWth.

  • Heat Pumps (ground and water source)

A small heat pump with a capacity to produce less than 100 kWth will get you 1.0 pence per kWth, whilst a large heat pump that can provide in excess of 100 kWth will get you 3.4 pence per kWth.

Renewable Heat Incentive Eligibility

To benefit from the Renewable Heat Incentive (RHI) you must meet the eligibility criteria to receive payments. To name a few criteria, the business/industry must have installed the technology after 15th July 2009, the technology must have a certain capacity, and the equipment must use liquid or steam to deliver the heat. The installer employed and the equipment itself must also have MCS certification (or equivalent) if applicable to the type of installation.

For full details on RHI and the eligibility criteria contact Ofgem or read the government guide to the Renewable Heat Incentive.