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.
- 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.
- 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.
- Is there any guarantee should my technology not work to expectations?
- If you use an MCS installer and product (or equivalent) for your installation you should receive a warranty for both the equipment and workmanship of your installation. Ask your installer about this; it is always a good idea to seek more than one quotation and you may wish to consider the type of warranty on offer alongside other considerations such as price. We will introduce you to 3 installers to ensure you get a good range of quotes.
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