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

What is the Renewable Heat Premium Payment?
The Renewable Heat Premium Payment is a scheme to support people who want to install renewable heat technologies. It will also help the government learn more about how these technologies work in practice, prior to the expansion of the Renewable Heat Incentive to the household sector.
What are the Renewable Heat Premium Payment eligibility criteria?
The main criteria are as follows:
  • Applicants must be the owners of or reside in the property for which the grant is applied (alternatively applicants who have leasehold ownership or tenancy occupation must have permission from the property freeholder) and it must be their primary residence.
  • For heating systems other than solar thermal, this must be the main heating system in the house.
  • The installation address must be situated in England, Scotland or Wales (the scheme is not available to addresses in Northern Ireland, the Isle of Man and the Channel Islands) and must be the applicant primary residence or a property occupied for the majority of the year.
  • Eligible technologies are Solar Thermal Hot Water, Air to water source Heat Pumps, Ground Source Heat Pumps, water to water heat pumps and biomass fuelled boilers (eg wood or wood pellet). Air to air heat pumps, wood fuelled stoves (unless they are part of a system with a back boiler) and bioliquid fuelled systems are not eligible for this scheme.
  • Solar Thermal Hot Water systems will be available to all householders.
  • For other technologies applicants must not currently use mains gas supply for their heating system.
  • Applicants must use a Microgeneration Certification Scheme (MCS) certificated installer (www.microgenerationcertification.org) and product or equivalent.
  • Renewable heating systems must supply a permanent residential building (mobile homes, caravans, house boats and systems heating swimming pools only are not eligible).
  • Basic energy efficiency measures must have been installed at the installation address (loft insulation up to 250mm where appropriate, cavity wall insulation where practicable).
  • Applicants must have received all relevant permissions for the installation including planning permission where required. If in doubt, please confirm with your local authority whether planning permission is required.
How much are the Renewable Heat Premium Payments?
It depends which technology you are applying for. The voucher values for each of the technologies are listed below.
  • Solar Thermal Hot Water - £300
  • Air Source Heat Pump - £850
  • Ground Source or Water Source Heat Pump - £1250
  • Biomass boiler - £950
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.
Are biomass hot air systems or wood burning stoves eligible?
No, only biomass systems which heat water to provide space heating are eligible. However, if your wood burning stove provides the main heating source through a back boiler, it will be eligible. Please be aware that Government is currently considering whether biomass stoves, even where they are the main heating source through a back boiler, will be supported under the long-term Renewable Heat Incentive (RHI). At this stage, there is no guarantee that they will be. DECC will be consulting on support for domestic participants in due course.
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