What is the Renewable Heat Incentive?
The Renewable Heat Incentive, or RHI, is designed to encourage the uptake of renewable energy heating systems by paying the owner of the system a set rate for every unit (kWh) of thermal energy it produces.
The RHI supports a number of renewable heating systems including ground source heat pumps, biomass boilers and solar thermal systems. It is designed to help meet the government’s target for 12% of the UK’s heat demand to come from renewable sources by 2020, a major increase from the current level of 1.5%.
The RHI for individual domestic installations is split into two parts: Premium Payments (which started on 1 August 2011) and Tariff Payments (currently due to start in Autumn 2012).
RHI tariffs for non-domestic installations and single installations serving more than one domestic property (such as a communal or district heating scheme) started in November 2011. These installations are not eligible for Premium Payments.
Premium Payments
This one-off grant payment contributes to the installation cost of individual domestic renewable heating systems. The scheme opened for applications from 1 August 2011 and systems must have been installed on 21 July 2011 or later to be eligible. It is due to close on 31 March 2012 unless all the grants are taken up beforehand.
| Technology | Amount | Voucher valid for | Availability |
| Air Source Heat Pumps | £850 | 5 months | Properties where mains gas is not currently used as the main heating fuel |
| Biomass Boilers | £950 | 6 months | |
| Ground Source Heat Pumps | £1,250 | 6 months | |
| Solar Water Heating | £300 | 3 months | All domestic properties |
There is a maximum of £15 million in total for the Premium Payments, £3 million of which has been set aside for social housing. The RHI Premium Payments are available on a first come first served basis so it is advisable to apply as early as you can to reduce the risk of missing out.
Applications should be made via the Energy Saving Trust (EST) website at www.energysavingtrust.org.uk/scheme/view/rhpp. . If you don’t have internet access you can call EST on 0800 512 012.
Who is eligible for the RHI Premium Payments?
There are a number of eligibility criteria for the Premium Payments:
- The renewable heating system must supply an existing permanent residential building
- For heat pumps and biomass boilers (but not solar thermal) mains gas must not be used as the main heating fuel in the building
- You must own or reside in the property and have permission from the property owner if you don’t own it yourself
- The property must be your primary residence or be occupied for the majority of the year
- It must have as much loft insulation installed as possible up to 250mm and cavity wall insulation installed if it has uninsulated cavity walls
- If a biomass system or heat pump is installed it must be the main heating system in the house
- The installer and product must be MCS certificated or equivalent, as we are at SunGift Solar
- You must have all necessary planning and environmental permissions in place
People who have installed an eligible renewable heat technology between 15 July 2009 and 21 July 2011 will be eligible for the RHI tariffs for individual domestic installations, but not for the Premium Payments.
There are several conditions attached to the Premium Payments:
- You will be required to complete two customer surveys
- You must be willing to have extra meters attached (free of charge) to your installation if required (not all installations will be required to have them) - you won’t have to take readings from them
- Failure to meet these conditions could result in penalties
- You must keep a record of all relevant documentation, including originals of any quotation/s and invoice/s, for 6 years following payment of the voucher and, if asked do so, you must allow representatives of EST to inspect and take copies
- If asked to do so you must allow representatives of EST or the Department of Energy and Climate Change (DECC) to inspect your installation so they can verify that you have complied with the terms and conditions of the Premium Payments scheme
RHI tariffs for individual domestic installations
RHI tariff payments for individual domestic installations are currently due to start in Autumn 2012, alongside the planned Green Deal scheme. The Green Deal will provide a loan for energy efficiency and small-scale renewable energy measures which will be paid off from the fuel bill savings resulting from these measures.
The government has not yet published the details, including the tariff levels and the eligibility criteria, for the RHI tariffs for individual domestic installations, although it has said the tariffs will be designed to offer a rate of return of around 12%. The government is currently planning to consult on the RHI for individual domestic installations later this year, when more details will be published.
The government has confirmed that people who receive a Premium Payment will be eligible for the RHI tariffs for individual domestic installations once they are introduced provided their installation meets the tariff eligibility criteria.
RHI tariffs for non-domestic installations and single installations serving more than one domestic property
| Technology | Size | Tariff (pence/kWh) |
Lifetime (years) |
| Biomass | Less the 200 kWth | 7.6p / 1.9p* | 20 |
| 200 kWth - 1000 kWth | 4.7p / 1.9p* | 20 | |
| 1000 kWth & above | 2.6p | 20 | |
| Ground Source Heat Pumps | Less than 100 kWth | 4.3p | 20 |
| 100 kWth & above | 3p | 20 | |
| Solar Thermal | Less than 200 kWth | 8.5p | 20 |
Please note: The government has not yet published the RHI tariffs for individual domestic installations.
*Payments for biomass installations up to 1000kWth are split into two tiers – the higher rates are paid for the first 1,300kWh of heat generated each year with the rate of 1.9p/kWh paid for any additional heat generated.
Where is the money coming from?
The RHI will be funded from general government spending, not through a RHI levy as previously proposed. This is a key difference between the RHI and the Feed-in Tariffs (FITs), which is funded by a levy on all electricity bills.
More information
If you have any questions or require any further information regarding the RHI or renewable energy technologies then give us a call on 01392 213912.
Useful links
The Energy Saving Trust (EST) website
www.energysavingtrust.org.uk/rhpp
The Department of Energy and Climate Change (DECC) website
www.decc.gov.uk/rhi
The Ofgem website
www.ofgem.gov.uk/RHI
