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.

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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.

Tariff rates

  • 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
At the moment, the total amount to be paid is determined by assessing your house’s heat demand – this is because your installation won’t necessarily have the capability to measure exactly how much heat is being generated. Households that take out support for this extra function will receive an extra £230 for heat pumps and £200 a year for biomass boilers. 

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
You need to have a Green Deal Assessment carried out on your house preferably before the installation – more information on this can be found on our Green Deal Assessment page. 

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.

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FAQs

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.
I received a grant under the Low Carbon Buildings Programme/Clear Skies Programme, can I apply for a voucher for a new different installation under this scheme?
Yes, although in these cases you cannot apply for funding for your existing installation and the new system must be used instead of an existing fossil fuel or electric heating system.
Why do I have to use an MCS installer and product or equivalent?
Installers and products used for the Renewable Heat Premium Payment scheme are certified by MCS (or an equivalent) which is an independent certification scheme designed to certify microgeneration products and installers in accordance with consistent standards. The primary aim of the MCS is to provide consumers with confidence and protection by guaranteeing that microgeneration products and installers who carry the mark meet, and will continue to meet, these robust quality standards.
Will I need planning permission for my installation or to notify my Local Authority?
Most installations are now classed as permitted development which means planning permission is not needed, but this will depend on the technology you are installing and where you live. Please check with your Local Authority before proceeding to ensure you have all of the correct permissions required and see further information on Planning Permission.
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