How does the RHI work?
The RHI, or Renewable Heat Incentive, is the Government's Pay As You Generate scheme for domestic renewable heat installations. The RHI will be administered by Ofgem E-Serve and is open for applications from Spring 2014, although the enquiries line is already open (0300 123 1234). More information on the administration of the RHI can be found on the Ofgem E-Serve: Renewable Heat Incentive web pages. The RHPP grant scheme is administered by the Energy Saving Trust. Applications for the RHPP can be processed on line - see the RHPP page for more information.
How the RHI works
The way the Renewable Heat Incentive works is fairly simple. First, the user pays for and installs an eligible renewable heat technology – the scheme covers biomass pellet stoves with a back plate boiler, biomass only boilers, water source heat pumps, ground source heat pumps, air to water heat pumps and evacuated and flat plate solar thermal installations. If the technology and the customer’s circumstances meet the requirements of the RHI scheme (below), they can then register the system with Ofgem who administer the RHI scheme.
They are then eligible to receive the Renewable Heat Incentive payment quarterly for the next 7 years. The amount paid is adjusted upwards for inflation over the payment period and is also dependent on a number of factors including:
- Amount of heat generated
- Technology type
The payment is designed to cover the difference between the installation cost for the renewable heat technology and the installation cost for a conventional system, the running costs of the system and any interest charged by finance providers.
At the end of the 7 years these costs should have been fully reimbursed to the customer. The lifetime of the technology is 20 years, so the customer will get a further 13 years’ worth of energy bill savings with that installation.
Customers applying to the RHI scheme can also apply to the RHPP grant scheme. which gives one-off grants for renewable heat installations. Applying for both has the effect of giving you more of the payable money upfront, as the RHPP grant amount will be deducted from your RHI payments to avoid a double subsidy.
- Solar thermal: At least 19.2p/kWh (Increases to this rate may be confirmed in Autumn)
- Biomass boiler: 12.2p/kWh
- Air to Water Heat Pump: 7.3p/kWh
- Ground Source Heat Pump: 18.8p/kWh
You Qualify for the RHI scheme if:
You installed an eligible technology after the 15th July 2009. Currently the qualifying technologies for domestic installations are:
- Solar Thermal water heating
- biomass boiler
- air source heat pump
- ground source
- water source heat pump
Your installer and installation will also have to be MCS certified – check that your installer is MCS compliant before going ahead with the work.
How to Apply to the RHI
DECC have said that information on how to apply to the RHI scheme will be released shortly – in the meantime, you can direct any questions about the scheme to the Energy Saving Advice Line on 0300 123 1234.
- How will the Renewable Heat Premium Payment scheme work?
- Individuals will be able to apply for a voucher which will be issued once they fill in the form. Once one of the qualifying technologies has been installed the voucher can be exchanged for grant money. If you are issued with a voucher you are not required to then install equipment but if you do, the voucher is a promise that you will receive the appropriate grant once your equipment has been installed and as long as the relevant conditions of the voucher are met. If you decide you will not use the voucher please inform the Energy Saving Trust, who are administering the scheme, as soon as possible.
- How do I apply for a Renewable Heat Premium Payment?
- The scheme opened to applications on 1st August 2011. You can apply online by going to the Energy Saving Trust website (www.energysavingtrust.org.uk/RHPP). Your should ensure that you meet the eligibility criteria. It is very important that those with vouchers check they have met all the conditions on that voucher, as claims may not be paid if the scheme terms and conditions and the terms on the voucher have not been met. Receiving a voucher is not sufficient evidence that you are entitled to a grant.
- Can I install the heating system before applying for a Renewable Heat Premium Payment voucher?
- You can, but at your own risk. Installations made from the announcement of full details of the scheme on 21st July 2011, but before the application for the voucher, will be eligible, including installations made between 21st July and 1st August 2011. If you as a householder do commission or carry out an installation before receiving a voucher, please make sure that you have read the terms and conditions of the scheme carefully. The Government or Energy Saving Trust, who administer the scheme, will not be liable for any costs in relation to decisions you have taken on this basis.
- Can I apply for more than one technology?
- Yes, although you must complete a separate application form for each technology. You cannot apply twice for the same technology at the same installation address.
- What if I can’t install the required basic energy efficiency measures?
- You must install the appropriate energy efficiency measures to be eligible for a voucher so this is a requirement only where it is possible to install the measures. So, for example, if you live in a solid wall property that does not have cavities then you do not need to install cavity wall insulation.
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