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Renewable Heat Incentive

Under the UK Government’s domestic Renewable Heat Incentive (RHI) scheme, you could receive quarterly cash payments over seven years if you install or have already installed an eligible renewable heating technology.

 

About the Renewable Heat Incentive (RHI)

The Renewable Heat Incentive (RHI) is a UK Government scheme set up to encourage uptake of renewable heat technologies amongst householders, communities and businesses through financial incentives. It is the first of its kind in the world and the UK Government expects the RHI to contribute towards the 2020 ambition of 12% of heating coming from renewable sources.

The domestic RHI was launched on 9th April 2014 and provides financial support to the owner of the renewable heating system for seven years. The scheme covers England, Wales and Scotland and is targeted at - but not limited to - off-gas households.

The UK Government's Department of Energy and Climate Change (DECC) makes key policy decisions and energy regulator Ofgem E-Serve administers the scheme. Policy documents can be found on the UK Government website. The eligibility requirements and rules of the scheme are on Ofgem's website.

Ofgem have also published a document of case studies from the domestic RHI for information.  

Please note that the information on this page is not an exhaustive list of all the criteria of the domestic RHI scheme.

 

Spring 2016 Regulatory Amendments

On 3 March 2016 the Department of Energy and Climate Change (DECC) announced their intention to make a number of changes to the Renewable Heat Incentive scheme.

These changes came into force on 24 March 2016 and key amendments included, but were not limited to, the following:

  • New applicants are not required to provide a Green Deal Advice Report (GDAR)
  • New applicants with self-build properties are exempt from the 183 days occupancy declaration
  • Clarification on Ofgem’s powers to request a new Energy Performance Certificate (EPC) and amend the RHI payments accordingly if needed
  • Tariffs will be subject to adjustment by the Consumer Prices Index (CPI) instead of the Retail Prices Index (RPI) (for participants with a tariff start state from 1 April 2016).
  • Ensuring consistency in rounding of tariffs
  • Aligning the RHI sustainability criteria with that set out in the Renewables Obligation Order 2015.

DECC  also published a consultation to seek feedback on the proposed reforms to the scheme. The renewable heat incentive: a reformed and refocused scheme consultation closed on 27 April 2016. 

You should keep these changes in mind if you are planning to apply for the domestic RHI scheme or are considering installing an eligible system. This is not an exhaustive list of changes to the scheme and further information can be found in the Renewable Heat Incentive: amendments to scheme eligibility document on DECC’s site.

Further information about the domestic Renewable Heat Incentive can be found below. 

 

What could I earn using RHI?

RHI cash payments are made quarterly over seven years. The amount you receive will depend on a number of factors - including the technology you install, the latest tariffs available for each technology and - in some cases - metering.

You can estimate how much money you could earn through RHI using the Department of Energy and Climate Change (DECC)’s RHI payment calculator.

Please note there are some elements that could affect RHI payment.

 

What technologies can I claim RHI support for?

  • Biomass (wood fuelled) boilers
  • Biomass pellet stoves with integrated boilers providing space heating
  • Ground to water heat pumps
  • Air to water heat pumps
  • Solar thermal panels (flat plate or evacuated tube only) providing hot water for your home

Air to air heat pumps, all log stoves, pellet stoves without back boilers and hybrid PVT are not supported by RHI.

Water source heat pumps can potentially be eligible for the Domestic RHI – they are included in the definition of a ground source heat pump.

Certain cooker stoves and certain high temperature heat pumps may also be eligible. 

All systems must also be listed on the Domestic Renewable Heat Incentive Product Eligibility List

All biomass fuel used by RHI participants must be sourced from a supplier on the Biomass Suppliers List (BSL) at the time the fuel was purchased. This is a list of suppliers of sustainable biomass fuel and it is advisable to check whether your fuel supplier is registered before entering into any long term supply contract. 

Not all fuels from suppliers on the BSL are sustainable as they may supply more than one type of fuel. You should check with your supplier, or prospective supplier, which of their fuels are registered.

The EU directives ‘The Ecodesign of Energy-related Products Directive’ (ErP) and ‘The Energy Labelling Directive’ introduced changes affecting heat pump eligibility. Key points included:

  • The introduction of a minimum performance standard for heat pumps that will be raised over time.
  • The introduction of a requirement for heat pumps to be sold with EU energy labels, which provide an efficiency rating.
  • From 26 September 2015 all new heat pumps entering the market must meet the directives requirements. And after 25 March 2016 all heat pumps must meet the requirements.

Find out more about the Introduction of the Ecodesign of Energy-related Products Directive.

 

Who can apply for RHI?

  • Owner-occupiers, self-builders, private landlords and registered providers of Social Housing who have installed an eligible technology can apply for RHI support (provided they meet eligibility criteria).
  • Single domestic dwellings are covered.
  • RHI support is not available to new build properties (other than self-build projects).

You must apply within one year of the commissioning date of your system.

 

How do I apply for RHI?

You can apply for RHI via Ofgem's website. Providing you have all the relevant information to hand and your application does not require a manual review, you should receive an immediate decision. To check if your application will need manual review, visit Ofgem’s website.

If you are unable to apply online then you can contact Ofgem via their Domestic RHI Applicant Support Centre on 0300 003 0744 Monday to Friday from 09:00 to 17:00 or by emailing: DomesticRHI@ofgem.gov.uk.

 

To apply you will need

  • MCS installation certificate number for the heating system
  • Energy Performance Certificate (EPC) number
  • Bank details

If you received a grant from Government or public funds you will also need to provide details of:

  • The amount you were paid
  • The date you were paid
  • Figures regarding the cost of the installation

 

Please also note:

  • If you are applying for RHI for heat pumps you will also need the Seasonal Performance Factor (SPF)
  • If you are applying for RHI for systems requiring metering will also need the Installer Metering Questions form.  

 

Tariffs

The table below summarises the latest tariffs available for each technology:

 

Air source heat pump

Biomass

Ground source heat pump

Solar thermal

Tariff (p/k Wh renewable heat)

Applications submitted between 1 Apr. 2016 and 30 Jun. 2016 incl.)

7.51 5.20 19.33 19.74

Tariff (p/k Wh renewable heat)

(Applications submitted between 1 Jul. 2016 and 30 Sept. 2016 incl.)

7.51 4.68 19.33 19.74

Tariff (p/k Wh renewable heat)

(Applications submitted between 1 Oct. 2016 and 31 Dec. 2016 incl.)

7.51 4.68 19.33 19.74

Tariff rates updated - 19 September 2016.

  • These tariffs have been set by the UK Government at a level designed to compensate for the difference between costs of installing and operating renewable heating systems and fossil fuel systems, including non-financial costs such as disruption, on the basis of 20 years of heat produced. Fossil fuel costs used are those for off-gas households.
  • Ofgem will make payments quarterly for seven years. Normally the heat required to heat the property will be deemed (estimated) and payments will be based on this amount.
  • Biomass -  renewable heat generated by biomass will be based on an estimated heat demand from an EPC
  • Heat pumps -  renewable heat generated by heat pumps will be based on an estimate of the heat demand from an EPC combined with an estimate of the heat pump's efficiency
  • Solar thermal systems - renewable heat generated by solar thermal systems will be based on the estimate of system performance completed as part of a Microgeneration Certification Scheme (MCS) installation.

 

Elements affecting payment

  • Once you are receiving domestic Domestic RHI payments, the rate you get will change annually. Prior to the Spring Regulatory amendments introduced on 24 March 2016 the rate changed in accordance with the Retail Price Index (RPI). Applications accredited on or after 1 April 2016 will be adjusted by the Consumer Prices Index (CPI) instead.
  • The RHI scheme uses a 'degression' system designed to manage the scheme budget available for the domestic RHI. From time to time, the tariff for a technology will be reduced (for new applicants only) if the total amount being claimed in total for that technology reaches a certain level. Anyone who is already claiming domestic RHI will not have their tariffs reduced through degression.
  • If you have already received a grant from Government or public funds (such as the Renewable Heat Premium Payment), then the amount received will be taken into account when calculating your domestic RHI payments.

 

Metering

Most domestic systems payments will be based on an estimated heat output (’deeming’). In some cases, meters are required to determine the technology’s heat output. Ofgem's Do I need metering for the Domestic Renewable Heat Incentive (RHI)? and Essential guide to metering factsheets have further details.

The Metering and Monitoring Service Package is an optional feature you could choose to buy from your installer when installing a renewable heating system to provide peace of mind the installation is working as expected; enable the installer to continually improve performance where possible; and to diagnose common problems if they occur.

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