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Renewable Heat Incentive

As of June 2011 there are two schemes that cover grants for renewable technologies. These are split into technologies that generate electricity which is covered by the feed in tariff. Renewable technologies that generate heat are covered by the renewable heat incentive or RHI for short.

The RHI covers technologies that generate heat for your home rather than electricity. So for the two types of solar panel technologies of photovoltaics such as the solar panel grants for homeowners that are currently available and solar thermal. One will be covered by the FITs scheme whilst the other will be funded by the RHI scheme. A list of other heat generating technologies are listed below.

  • Solar thermal
  • Air source heat pump
  • Ground source heat pump
  • Water source heat pumps
  • Biomass heating
  • CHP
  • Biogas
  • Bioliquids
  • Biomethane
  • Geothermal

What types of grant are available?

A grant will be made available to bridge the gap between the difference in cost between the renewable system installed and the conventional fossil fuel alternative. There is also an investment rate that is paid at 6 percent for solar thermal and 12 percent for other technologies.

The aim of the renewable heat incentive is to encourage people to opt for the greener renewable alternative to heating their homes. To this end the grant should make installing a renewable heat technology the same cost as conventional heating.

This scheme was operational from 15th July 2009 so any installation that was carried out after this date will qualify under the RHI scheme. The scheme covers the installed technology for up to 23 years. You will get a payment every year based on the rate of return previously specified at 6 and 12 percent dependant on the particular renewable technology.

RHI tariff payments

  • Solid biomass - 9p kWh for 15 years
  • Bioliquids - 6.5p kWh for 15 years
  • Biogas on-site combustion - 5.5p kWh for 10 years
  • Ground source heat pumps - 7p kWh for 23 years
  • Air source heat pumps - 7.5p kWh for 18 years
  • Solar thermal -18p kWh for 20 years

Unlike electricity it is difficult to meter heat generated by these renewable resources. It is also not possible to sell back the heat to the grid unlike electricity. Therefore payments are based on deemed heat generated rather than the actual amount.

The payments are paid for up to 23 years depending on the technology and rates are up to 18 pence per kilowatt hour. You can find out more about the renewable heat incentive scheme on the department of energy and climate change website.

Who Can Benefit From The Renewable Heat Incentive?

renewable heat incentive backed by green MP Caroline LucasThe RHI scheme works in a similar way to the FITs scheme where people will be paid a tariff for all the heat energy they produce thorough renewable methods. Like FITs the renewable heating technologies that are covered by the scheme are published so as everyone knows which technologies are covered.

Depending on the renewable technology you will be paid a tariff for every unit of heat energy that you produce, this is measured in KWh. This covers water heating and heating for the home. The idea of the tariff is that it will make the newer greener technologies more financially viable. In essence you will be better off financially for using heating systems that reduce our carbon footprint.

Most anyone can benefit from the scheme. Homeowners, social housing schemes, community groups and business. The tariff system is tiered so the payments that you can claim will depend on the capacity of the system installed. Homeowners would qualify under the small installations rates being paid.

Renewable Heat Premium Payment (RHPP)

The Renewable Heat Incentive (RHI) starts In October 2012 for householders who will be able to take advantage of the heating payments for homes using renewable technologies such as heat pumps. From August 2011 until the end of March 2012 there will also be an additional grant available to households installing renewable heating technologies such as heat pumps and solar thermal. This new grant is the prelude to the launch of the RHI and is called the Renewable Heat Premium Payment (RHPP).

This additional premium payment is to help towards the cost of installing renewable heating technologies. The payments are available by registering your interest for the Renewable Heat Premium Payment via the Energy Savings Trust website. There are some stipulations that have to be met in order to qualify such as your home needs to be insulated (you can get a grant for home insulation to do this). If you apply and get the RHPP grant you can still get the RHI payments.

Grant amounts and what is covered

The RHPP grants are available to everyone for solar thermal; these are the solar panels that generate heating and hot water for your home. You can claim £300 towards the cost of a system that currently costs around £4,500. The other technologies only attract up front grant payments if your home is currently not heated with mains gas such as oil fired boilers.

The renewable heating technologies include heat pumps and biomass boilers. For an air source heat pump you can get a grant of £850, systems typically start from around £6,000. Air source heat pumps are probably the most suitable for retro fitting to an existing property and this technology has been around for quite some time. Ground source heat pumps attract a grant of £1,250 and a system can cost from around £9,000. Finally you can get a grant of £950 towards the cost of a biomass boiler which can cost about £11,000.

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