What is the Renewable Heat Incentive?

What is the Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is a government scheme designed to encourage the uptake of renewable heat energy technology. It was rolled out to English, Scottish and Welsh households in 2014. Here’s how to find out if you’re eligible for quarterly cash payments under this incentive programme. 

The Domestic RHI is an innovative government programme launched in 2014. It was designed to help the UK meet renewable energy targets and reduce carbon emissions. The government aims to source 12% of the nation’s energy from renewable sources by 2020. By offering a cash incentive to eligible households, it promotes the use of renewable heat sources within the home. The Department for Business, Energy & Industrial Strategy (BEIS) make policy decisions about the RHI, and industry regulator Ofgem takes care of the day-to-day admin. 

Examples of eligible heat sources could include everything from solar thermal to ground source heat pumps. If your installation and household are eligible for the scheme, you could receive quarterly cash payments for seven years. The payment amount will depend on several factors, including the amount of renewable energy generated and the tariff rates. Thousands of people have already joined and received payments for their clean, green heat sources, including households both on and off the national grid. The result is a lower energy bill.

What recent changes have there been to the Renewable Heat Incentive?

Since it was first launched in 2014, there have been several changes to the RHI rules. This is because the BEIS reviews its policies from time to time. In March 2016, important changes were announced which have come into effect in two stages. 

One important change to be aware of was a change to the installation standards for heat pumps, effective from 31 July 2017. If you’ve submitted an application for a heat pump with a first commissioning date after 30 October 2017, you’ll need to be sure it meets the latest criteria under the Microgeneration Certification Scheme (MCS). These MCS standards are important, because they make sure installers of technology like heat pumps comply with the latest industry standards. Be sure to check the Ofgem website when you’re applying for the Domestic RHI to keep up to date with any other changes in the scheme. 

Which technologies are included?

The Domestic RHI is designed for household energy improvement. To qualify, there are a few different types of renewable energy technologies that you could install within your home. Suitable systems include the following:

  • Ground source heat pumps 

  • Air source heat pumps

  • Biomass (wood fuelled) boilers

  • Biomass pellet stoves with integrated boilers

  • Solar thermal panels to provide hot water 

Not all heat sources are supported by the RHI. Here’s a quick rundown of what’s not eligible for the scheme: 

  • Air to air heat pumps

  • Pellet stoves without back boilers

  • Hybrid PVT

  • Log stoves 

If you opt for a biomass stove or boiler, the biomass fuel must be sourced from an approved sustainable biomass supplier. 

The renewable energy list is not exhaustive and is subject to change, so be sure to check the Ofgem site for the latest rules. The payment amounts will depend on the type of technology, the available tariffs, and metering, so it’s worth weighing these different factors when determining which type of technology to install. 

Are there additional eligibility requirements?

In addition to the type of heating technology, there are a few other eligibility requirements included as part of the RHI. Here’s a quick look at the rules:

  • You must apply for the RHI within one year of your system’s commissioning date.

  • Single domestic dwellings are eligible. 

  • Owner-occupiers, private landlords, and self-builders who have installed qualifying technology are eligible. 

  • Registered providers of Social Housing may apply. 

  • The building must have an Energy Performance Certificate (EPC). 

However, while self-build projects are eligible for RHI support, other new build properties are not under the Domestic scheme. 

How can I apply for the RHI?

You can apply for the RHI scheme on the Ofgem website, or phone the Domestic RHI Applicant Support Centre on 0300 003 0744. The phone line is open from Monday to Friday between the hours of 09:00 and 17:00, or you can email DomesticRHI@ofgem.gov.uk. 

To get started, gather all the relevant information about your property and the heating technology you’ve chosen to install: 

  • Your name and address

  • Energy Performance Certificate (EPC) number for your property

  • The MCS installation certificate number for your heating system

  • Your banking details

  • The Seasonal Performance Factor (SPF) if applying for a heat pump

  • Installing Metering Questions form (if you are applying for systems requiring metering)

You still may be eligible for RHI assistance if you’ve received a government grant or public funds. However, in this case the application will ask for additional information, including the date you received funds, the amount you were paid and any other figures regarding installation cost. 

How are RHI payments allocated?

After your application has been approved, you’ll receive quarterly payments from Ofgem for the next seven years. The specific amount will depend on the type of technology you’ve installed, and the current tariffs defined by the UK government. The idea is that these tariffs compensate for the cost of installation and operation of your renewable heating system. 

The heat required to warm your property will be estimated, with payment amounts based on this amount. This is calculated in different ways depending on the type of technology: 

  • Biomass – The heat is estimated on demand based on the EPC

  • Heat pumps – The amount of heat generated is based both on the EPC as well as the heat pump’s efficiency

  • Solar thermal system – Heat is estimated on the system’s performance, which is tested during the Microgeneration Certification Scheme (MCS) installation

It’s important to note that your payment rates will change from year to year. Rates are adjusted annually according to the Consumer Prices Index (CPI). Tariffs might also be reduced over time for new applicants, due to the scheme’s ‘degression’ system to regulate payments. 

Your payment amounts will be adjusted if you’ve already received public funds or a government grant. One example of this would be the Renewable Heat Premium Payment. You’ll need to note this on your application, and this amount will be used to offset your domestic RHI payments. 

How does metering work?

In the majority of cases, domestic systems payments are based on estimated figures pertaining to your system’s heat output. While this is based solely on the EPC in the case of biomass technologies, in others, meters are used to determine how much heat is produced. One of the most recent changes to the RHI scheme states that any new heat pumps registered must be metered, for this reason. 

There’s also an optional monitoring service called the Metering and Monitoring Service Packages (MMSP). These are used to ensure your renewable heating system is in full working order. You can sign up for MMSPs with your systems installer, providing a smart feedback loop of data that alerts the installer if something isn’t working correctly. They’re available for ground source heat pumps, air source heat pumps and biomass pellet boilers. If you decide to sign up for an MMSP, you’ll be paid a bit extra as part of the RHI to cover the cost of this added package. Sign up for this at the same time as your application to receive MMSP payments right from the start. 

Is the Renewable Heat Incentive right for me?

If you meet the eligibility requirements and are willing to do a little research to see which renewable heat source is best for your property, the RHI could be a great option. Systems like ground source heat pumps are impacted by the soil conditions, while solar panels won’t be as efficient in shaded areas. Clay-based soil retains more heat than sand, for example – so a good systems installer will assess your ground conditions, home layout, and other factors to give personalised advice. 

Although it does take some time and effort, the benefits of installing renewable heating are huge. You not only have access to a more efficient source of heating for your home, but you could be eligible for quarterly cash payments from the government to offset your energy bill.

Bjorn GriffithDec 9th 2019