Last edited 19 Jun 2018

Renewable heat incentive RHI

Contents

[edit] Introduction

Our society is heavily dependent on fossil fuels such as oil, gas and coal, and is likely to remain dependent on them for much of this century. Every year we emit more than 20 billion tonnes of carbon into the atmosphere by burning fossil fuels, half of which is absorbed in the seas and by vegetation, and half of which remains in the atmosphere.

The renewable heat incentive (RHI) was launched by the UK government in November 2011 to help reduce greenhouse gas emissions and meet targets to reduce the effects of climate change. Described by the government as ‘the world’s first long-term financial support programme for renewable heat’, it is similar to the feed in tariff scheme for elecricity generation, but is designed to incentivise heat generation.

The renewable heat incentive scheme makes payments to participants that generate renewable energy and use it to heat their buildings. The payments are intended to bridge the gap between the cost of fossil fuel heat installations and renewable heat alternatives.

It was initially a non-domestic scheme, only open to commercial, industrial, public sector, not for profit organisations and heat networks. A domestic RHI scheme was launched on 9 April 2014. (ref Gov.uk Increasing the use of low-carbon technologies).

[edit] Non-domestic RHI

Eligible technologies for the non-domestic RHI include:

From 28 May 2014:

Equipment must use liquid or steam to deliver heat to spaces, water or processes. MCS is not required for the non-domestic RHI.

Payments are spread over 20 years, with the tariff depending on:

  • The type of technology.
  • The capacity of the technology.
  • The amount of heat generated, as measured by class 2 heat meters.

Tariffs can be found on the Ofgem website.

[edit] Domestic RHI

The domestic RHI is targeted at, but not limited to, homes that are not connected to the gas network as these have the greatest potential for savings. Eligible technologies include:

Tariffs depend on the technology adopted and have been set at a level that reflects the expected cost of renewable heat generation over 20 years. Payments are made on a quarterly basis over seven years. See Ofgem, Domestic RHI for more information.

Applicants must first have a green deal assessment carried out, must install loft insulation if it is recommended, must have a domestic Energy Performance Certificate (EPC) and the renewable heating system, and the installer, must be certified under the Microgeneration Certification Scheme. The deemed heat use is taken from the EPC.

NB A householder voucher scheme, the Renewable Heat Premium Payment scheme, which provided one-off payments to householders to help them purchase renewable heating technologies such as solar thermal panels, heat pumps and biomass boilers, closed on 31 March 2014 (ref gov.uk Renewable Heat Premium Payment scheme).

[edit] Reform

In November 2015, the government renewed its commitment to the transition to a low carbon economy by confirming a continued budget for the RHI.

However, between 3 March and 27 April 2016, the government consulted on proposed reforms to both the domestic and non-domestic schemes. On 9 February 2018, in response to the consultation, the government issued a reformed and refocused scheme.

The reforms are intended to ensure:

  • Long-term decarbonisation, promoting the deployment of the right technologies.
  • Better value for money, improving cost control and giving consumers more confidence in the performance of particular technologies.
  • Supply chain growth, driving cost reductions and innovation.

Socrates Christidis, Senior Market Intelligence Analyst at BSRIA’s World Market Intelligence Division, said; “There is a raft of real changes to the RHI and BSRIA is broadly supportive of this reformed and refocused scheme. RHI will foster the renewable heat market and supply chain to assist the delivery of low carbon heating technologies. These reforms to the RHI will guarantee it focuses on long term decarbonisation and offers better value for money for consumers – which is win win.”

The new regulations came into effect on 22 May 2018.

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