Renewable Heat Incentive


The Renewable Heat Incentive provides a financial support mechanism for heat from renewable sources in a similar way to the Feed-in Tariff does for electricity. This scheme is groundbreaking since no other country in the world offers a scheme for renewable heat on this scale. This also helps explain the delays in implementing it. The Renewable Heat Incentive came into effect in April 2012 for non-domestic installations. For domestic installations it has been be available since April 2014.
Some key points are:
  • Unlike the FiT, the RHI is not subject to a 5MW limit
  • The RHI will be funded by a levy on all fossil fuel users
  • The rates and terms for commercial and domestic installations are different
  • Provided the installation is compliant with the rules and was installed since July 2009 RHI can be claimed

Non-Domestic


The rates for Non-Domestic installations are are:






Tariff NameEligible TechnologyEligible SizesTierCurrent applicable tariffs RPI adjusted tariff for 1 April 2014 (2.7%)
Small commercial biomass
Solid biomass including solid biomass contained in municipal solid waste and CHP
Less than 200 kWth
Tier 1
8.6
8.8
Tier 2
2.2
2.3
Medium commercial Biomass
200 kWth and above; less than 1MWth
Tier 1
5.3
5.4
Tier 2
2.2
2.3
Medium commercial Biomass
(w/e from 1 July 2013)
Tier 1
5.0
5.1
Tier 2
2.1
2.2
Large commercial Biomass
1MWth and above
N/A
1
1
Small commercial heat pumps
Ground-source heat pumps; Water Source heat pumps; deep geothermal
Less than 100 kWth
N/A
4.8
4.9
Large commercial heat pumps
100 kWth and above
N/A
3.5
3.6
All solar collectors
Solar collectors
Less than 200 kWth
N/A
9.2
9.4
Biomethane and biogas combustion
Biomethane injection and biogas combustion,
Biomethane all scales, biogas combustion less than 200 kWh
N/A
7.3
7.5

The Non-Domestic RHI provides financial support for renewable heat technologies for the lifetime of the installation (for 20 years). The method of calculating payments is not straight forward except for small installations, however ofgem publish a reasonably clear summary of the rules here.


Domestic


The scheme covers single domestic dwellings and is open to homeowners, private landlords, social landlords and self-builders. It is not be open to new build properties other than self-build.
The domestic RHI will pay the following tariffs per unit of heat generated for seven years:

Technology

Tariff

Air-source heat pumps

7.3p/kWh
Ground and water-source heat pumps
18.8p/kWh
Biomass-only boilers and biomass pellet stoves with integrated boilers
12.2p/kWh
Solar thermal panels (flat plate and evacuated tube for hot water only)
19.2 p/kWh