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

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.
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.
Are air to air heat pumps eligible?
No
Will the scheme support second hand kit or renewable energy systems replacing existing renewable systems?
No, the kit has to be new and the system should normally replace a fossil fuel or electric heating system (except for self build new-build).
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