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.
- Who can apply for a Renewable Heat Premium Payment grant?
- Individuals who own their own property and reside within England, Wales or Scotland can apply for installations at their primary residence. Please note that this scheme does not apply to residents of Northern Ireland, the Isle of Man or the Channel Islands. If you rent your property privately, approach your landlord as you may need to work with them to apply for the scheme.
- Will I need to pay for any monitoring that is carried out?
- A significant proportion of applicants will be approached by Energy Saving Trust to have additional meters attached to their installation which will monitor the performance of the heating system. They will not have to pay for these or take readings themselves. Everyone has to agree to let a meter be installed as part of the terms and conditions of the scheme. For everyone else, any meters and controls which come with the product already will be sufficient. You will be asked through surveys information about these meters and the bills that you get; and in particular how easy it is to understand the meters and the controls, as well as general feedback on your satisfaction with the system installation and its performance.
- If I receive a Renewable Heat Premium Payment, will I be eligible for the Renewable Heat Incentive when it is introduced?
- The Government has confirmed that renewable heat installations installed in homes since 15 July 2009 will get the Renewable Heat Incentive once it comes in, provided they meet the eligibility criteria. They have also confirmed that this will include those who receive support under the RHPP scheme. However, the Government has not yet published its proposals for how the RHI will work in the domestic sector, so we cannot at this stage provide more information on this. In particular we cannot guarantee that those eligible for an RHPP grant will also be eligible for the RHI.
- If I make a successful application to the scheme and receive a Renewable Heat Premium Payment voucher, how long is it valid for?
- This depends on the technology you have applied for. The voucher validity periods for each of the technologies are listed below.
- Solar Thermal Hot Water - 3 months
- Air Source Heat Pump - 5 months
- Ground Source Heat Pump - 6 months
- Biomass boiler - 6 months
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