The Renewable Heat Incentive (RHI) is a new incentive introduced by the government to encourage people to generate more of the heat they need from renewable sources, like solar power, heat pumps or anaerobic digestion and so use less fossil fuels. Currently 99% of the heat we need is generated using fossil fuels and the government has a target of reducing that figure to 88% by 2020.<\/p>\n
The scheme involves people installing renewable heat technologies in their homes or businesses in return for an annual payment for the heat those systems produce. The scheme is due to commence from 01 April 2011.<\/p>\n
Under the scheme, you must first install some form of renewable heat technology, such as solar thermal panels, air source heat pumps, biomass boilers or other eligible technology and then register it with Ofgem, the energy industry regulator. Once registered, you will be eligible to receive payments for the heat generated by the system. Though the details have yet to be finalised it is anticipated that the payments will be paid by Ofgem by way of an annual lump sum payment direct to your bank account.<\/p>\n
This depends on the type of system you choose to install and the size of the property; see the table below for details. You will be paid per kilowatt hour of heat produced. As an example, for an average household using 15,000kWh of heat in a year which installs, say, solar thermal panels and a biomass boiler which could generate 13,700kWh, the payment via the renewable heat incentive would be around \u00a31,400. The fuel for the biomass boiler (a wood burning boiler) would need to be purchased at a cost of around \u00a3575 so the net profit would be \u00a3825, not to mention the money saved on gas or oil would have needed to have been purchased to fuel a conventional boiler.<\/p>\n
Technology<\/strong><\/td>\n| Scale<\/strong><\/td>\n | Tariffs (pence\/kWh)<\/strong><\/td>\n | Tariff lifetime (years)<\/strong><\/td>\n | <\/td>\n<\/tr>\n | Small Installations<\/td>\n | <\/td>\n<\/tr>\n | Solid biomass<\/td>\n | Up to 45kW<\/td>\n | 9<\/td>\n | 15<\/td>\n | <\/td>\n<\/tr>\n | Biodiesel (restricted use)<\/td>\n | Up to 45kW<\/td>\n | 6.5<\/td>\n | 15<\/td>\n | <\/td>\n<\/tr>\n | Biogas on site combustion<\/td>\n | Up to 45kW<\/td>\n | 5.5<\/td>\n | 10<\/td>\n | <\/td>\n<\/tr>\n | Ground source heat pumps<\/td>\n | Up to 45kW<\/td>\n | 7<\/td>\n | 23<\/td>\n | <\/td>\n<\/tr>\n | Air source heat pumps<\/td>\n | Up to 45kW<\/td>\n | 7.5<\/td>\n | 18<\/td>\n | <\/td>\n<\/tr>\n | Solar thermal<\/td>\n | Up to 45kW<\/td>\n | 18<\/td>\n | 20<\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n | How is the Renewable Heat Incentive Calculated?<\/h2>\nFor domestic installations the renewable heat incentive will be calculated on a \u201cdeemed\u201d basis, that is, an assessment will be made as to how much heat, in kilowatt hours (kWh), the system should produce in a year and you will be paid x pence per kWh, limited to the amount of heat actually needed (you won’t be paid for producing heat you don’t need). When calculating the amount of heat needed it will be assumed that the property meets a minimum heat efficiency standard, even if in practice it does not. The actual standards have your to be finalised but the important point here is that if you need to produce more heat than would be required if your property met the minimum standard, you will not be paid for any \u201cexcess\u201d. It makes sense therefore to invest in some energy efficiency measures, such as insulation, as well as the renewable heat system itself.<\/p>\n Is the Payment Guaranteed?<\/strong><\/h2>\n |