The Renewable Heat Incentive
Solar Thermal, Air-Source & Ground-Source Heat Pumps and Biomass Boilers
Stop Press! Government extends RHP scheme (announced March 26th 2012)You can still claim an installation subsidy on domestic installations of solar thermal systems and biomass boilers, and also on heat pumps installed in properties without mains gas.
The subsidies are as follows:
Thats' a £ 1000 contributiontowards going solar! |
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| That's an £1250 contribution towards a new heating and hot-water system! |
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| That's an £850 contribution towards a new heating and hot-water system! |
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| That's a £950 contribution towards a new heating and hot-water system! |
The Renewable Heat Premium scheme was due to end on 31st March 2012. But luckily the government extended the scheme on 26th March 2012. New funds have been made available and there is as yet no deadline for when the new scheme will end. |
Click here to request a quote for a solar hot water system so that you don't miss out on the £300 Renewable Heat Premium. If you buy PV as well you can claim a £700 discount.
Click here to request a quote for an air-source heat pump. To find out more about heat pump accessory packages, visit our products page.
Click here to request a quote for a biomass boiler. To find out more about biomass products, visit our products page.
Introduction
The Renewable Heat Incentive (RHI) is a scheme set up by the Government to encourage consumers, commercial enterprises and public sector enterprises (schools, hospitals etc.) to generate heat energy from renewable sources: for example solar hot water, air source heat pumps, ground source heat pumps and biomass.
Heat production in domestic and business premises is responsible for over half (55%) of the final energy demand consumed in the UK and roughly half of the UK's carbon emissions (ONS, 2002). Taking action now to switch away from fossil fuels to cleaner and more sustainable sources of energy will reduce the impact that our heat requirements have on the environment and help ensure the UK has an energy supply that is safe, secure and reliable.
When will it happen and how will it work?
The RHI / RHPP is a system of upfront payments (the Renewable Heat Premium) and 20 year tariffs (the Renewable Heat Incentive) payable for energy generated by renewable heat technologies. It is being introduced in two phases:
Phase I (introduced November 2011) to include tariffs for commercial (non-domestic) systems and a range of Renewable Heat Premiums for domestic, renewable heat technologies installed between 1st August 2011 and 31st March 2012; andPhase II (expected to be introduced October 2012 - but not confirmed) to include tariffs for domestic systems installed after 15th July 2009.
PHASE 1: RHPP FOR DOMESTIC HEATING & HOT WATER SYSTEMS AND TARIFF FOR COMMERCIAL INSTALLS |
Phase I: Renewable Heat Premium for Domestic Installs (introduced November 2011)
- The Renewable Heat Premium scheme is a short-term scheme intended to encourage the uptake of renewable heat-producing units and to act as a learning exercise. It includes a pot of £15 million to be dispensed in around 25,000 redeemable vouchers across a range of technologies.
- Each household installing the technology between 1st August 2011 and 31st March 2012 can claim a one off payment for each of the technologies listed below. Heat Pump and Biomass boiler payments are only available for the 4 million houses which are not currently connected to mains gas.
- Any domestic house is able to apply for the £300 solar thermal premium. One payment can be claimed per technology; providing even more of an incentive to install solar thermal and a heat pump simultaneously. Those claiming the Renewable Heat Premium will still be able to claim any tariffs introduced for domestic properties under Phase 2 of the Renewable Heat Incentive.
*Only for houses which don't use gas for main heating
In order to qualify:
- The property must be your main home, or you must have the landlord's express permission.
- The property must have loft insulation to 250mm and cavity wall insulation (where practical).
- All necessary planning and environmental permissions should be in place.
- The installation must use certified products and a certified installer (Spirit Solar is a certified installer and we only recommend certified products.)
- You will be asked to fill in two surveys about how your system is working and how easy you find it to control. Some households
will be provided with an extra meter to monitor the system's productivity. Any of the anonymous data collected will help the government set national future tariff payments or inform policy decisions. - The process requires you to request a voucher for the relevant technology from the Energy Savings Trust. Once installation has taken place, you must return the voucher (signed) along with the final invoice and MCS certificate provided by your installer. The cash value of the voucher will then be sent straight to your bank account.
To claim the RHPP or read more Click here:
Phase I: Tariffs for Commercial Installations (introduced November 2011)
The first phase also includes a fixed 20 year tariff support for non-domestic installs, aimed at the big heat users - the industrial, business and public sector - which contribute 38% of the UK's carbon emissions.
A generation tariff will be paid for every kWh (kilowatt-hour of energy produced). The level of payment depends on the technology and the system size.
The following tariffs have been published for the initial phase of the scheme:
As with the Feed-In Tariff for Solar PV, the tariffs are inflation linked and go up with the RPI
*This table displays kWth (kilowatt thermal-hours) simply to denote that the output is not electrical. The same values above would normally just be quoted as Kilowatt hours.
1) AIR SOURCE HEAT PUMPS As can be seen from the table above; air source heat pumps in commercial projects are not currently eligible for the Renewable Heat Incentive. This has been justified by DECC on the grounds that air source heat pumps are more prevalent at a commercial level, and it is far harder to measure how much heat is produced and how efficiently the system is running. Introducing air-source heat pumps to the commercial RHI will be reviewed in 2012.
2) INSTALLATIONS WHICH HAVE ALREADY RECEIVED GRANTS (ALL TECHNOLOGIES) If you received a grant towards install costs before the 28th of November, the grant can be repaid in order for the system to be eligible to receive the RHI tariff payments. Any installations from 28th November 2011 onwards, must choose between accepting a grant and claiming the tariff income. They will not be eligible for both and will not be able to return grants.
3) BIOMASS RHI TIERED PAYMENT SYSTEM The biomass RHI tariff is tiered, to avoid any incentive to generators to generate excess or wasteful heat just to maximise their RHI payments. In each year the Tier 1 tariff is paid until the system has operated at full capacity for 15% of the year (equivalent to 1,314 peak hours). For the remainder of the year the Tier 2 tariff will apply. This Tier break point has been defined in the Government's RHI announcement as "our estimate of a reasonable minimum level of usage that we would expect from a renewable heat installation used for space heating".
Delay to Phase 1 tariffs for commercial installations:
The RHI for non-domestic generators was supposed to come into effect on 30th September 2011 but was delayed until the 28th November after a review of the tariff level for large biomass projects was instigated on the recommendations of the European Commission.
How to register and claim the RHI for commercial installations
Now that the tariff levels have been approved, the RHI for commercial projects is open for applications.
Visit this website for specific information on applying for the tariff: http://www.ofgem.gov.uk/e-serve/RHI/Pages/RHI.aspx
Alternatively, contact your installer for more information and advice on submitting a tariff claim.
PHASE 2: DOMESTIC TARIFFS (expected October 2012,but not confirmed) |
The scheme will be administered by Ofgem, and paid for by the Treasury. It is similar to the Feed-in Tariffs, a comparable scheme set up to encourage generation of electricity using renewable sources. However the generation of heat energy is generally less easy to measure and the operation of the scheme is slightly different from the Feed-in tariffs. Specifically the scheme will operate as follows:
Step One: you install renewable heat systems in your property such as solar thermal panels, heat pumps or a biomass (wood burning) boiler.
Step Two: the installer (who must be MCS accredited) makes an estimate of how much heat your renewable energy systems will produce. For larger systems, the heat output will be metered rather than estimated.
Step Three: you get paid a fixed amount (see Tariffs below), based on that estimate, over set period of time (see tariff levels for details).
Domestic introduction is expected to be October 2012 though it is still to be confirmed, pending delays to the introduction of the non-domestic RHI.
No tariffs have yet been published.
The original consultation document for the Renewable Heat Incentive, previously proposed tariff levels which may or may not be indicative of the final published tariff levels. The indicative tariffs are as follows:
A NOTE ON TARIFF DEGRESSION |
As the costs of renewable heat equipment may fall in real terms over the years, the Government may decide to reduce the tariff rates for people who start later in the scheme. This is known as 'degression' and is similar to what happens within the Feed-In Tariffs scheme.
The Government currently plans to review degression at the periodic reviews of the RHI to reassess technology cost levels as appropriate. The first review is due to take effect from April 2013.
How the output will be measured - estimates versus metering
There are two different approaches that can be used to measure the heat output of systems: metering and 'deeming' (i.e. estimating the likely heat output).
The current proposals are that both should be used, depending on the size of the system:
SMALL SYSTEMS |
The levels of payment will be based on what the installed system would be expected to deliver if the property were well insulated. The RHI will define what 'well insulated' will mean; in the original consultation document the minimum requirement is 125mm of loft insulation and cavity wall filling, where appropriate.
MEDIUM-SCALE INSTALLATIONS |
In principle this will be similar to the approach taken for small-scale installations. However, there will be the option of metering for solid biomass installations. If metering is chosen, the same tariff levels will apply for the same deemed number of kWh for the property. However, where the metered number of kWh used exceeds the deemed number, an additional lower tariff per kWh would be paid to cover the excess.
LARGE-SCALE INSTALLATIONS |
All payments will be made by calculating the metered number of kWh multiplied by the tariff per kWh.
Biomethane injection and district heating
It is proposed that this be metered at all scales.
Eligibility - Installation dates
The biomass RHI only applies to biomass systems where a boiler is present. Biomass stoves do not currently qualify.
SYSTEMS INSTALLED BEFORE OCTOBER 2012 |
Systems installed before Phase 2 of the RHI in October 2012, but after 15th July 2009, will be able to join the Renewable Heat Incentive scheme. The payments will not be backdated, but the tariff lifetime will be just as long as for those projects installed after October 2012. The equivalent overall tariff income would be earned.
Systems installed from OCTOBER 2012 onwards
You will receive Renewable Heat Incentive payments from the date of registration for between 10 and 23 years after installation, depending on the selected technology.
Other eligibility criteria
- Available to private, domestic homeowners
- Living in England, Scotland and Wales
- Must have loft and cavity wall insulation installed, where at all possible.
- Systems to be fitted using MCS certified kit, by accredited installers.
- May be necessary to provide feedback on performance.
- Could require monitoring equipment to be fitted.
Insulation - minimum energy efficiency criteria
You should always aim to make your building energy efficient with insulation and draft-proofing before installing renewable heating.
For domestic houses, the minimum requirements (as set out in the consultation document) are:
- At least 125mm of loft insulation
- Cavity wall insulation, where appropriate
There is a case to suggest that this is too lenient and there is an expectation that this will be one of the areas that is changed before the scheme goes live.
How to register and claim the RHI for domestic installations
At the moment you can't register as the scheme isn't live! Once Ofgem launches its database your MCS installer will register the installation. Ofgem will pay the incentive direct to your bank account, probably as an annual lump sum.