What is the Renewable Heat Incentive (RHI)?
The RHI is a financial incentive scheme designed to encourage homeowners and businesses to install heating systems which use renewable energy. Heating and hot water is responsible for the majority of a typical home’s carbon emissions. Moving to renewable heating technologies is one of the best ways to reduce your home’s environmental impact.
How is the RHI expected to work?
As the owner of an eligible system you will receive a regular payment for a “deemed” amount of heat that your system is expected to generate. This payment is intended to cover the additional cost of installing the system, fuel and related costs over and above that of a typical gas, oil or LPG heating system.
Although the details of the scheme have not yet been finalised, the government currently proposes to pay homeowners over seven years the costs of buying and running the heating system over its expected lifetime of 20 years.
The scheme is mainly aimed at encouraging new installations. But anyone who has installed an eligible technology from 15 July 2009 can claim the RHI payments. All installations, old and new, must meet the requirements of the Microgeneration Certification Scheme – more information on the MCS can be found at http://www.microgenerationcertification.org/consumers/consumers.
What technologies are eligible for the RHI?
At present the government is proposing that the following renewable technologies will be eligible: ground-source heat pumps, air-to-water heat pumps, solar hot water panels, biomass (e.g. wood pellet or log) boilers and wood-pellet boiler stoves.
Can I use the Green Deal to cover the initial cost and still claim RHI payments?
Yes – the Green Deal and RHI can be used together, although income from the RHI payments cannot be considered when the repayments are calculated.
When will the RHI start?
The RHI scheme is expected to start in spring 2014. Up until then you may be eligible for a grant of approximately 10% of the cost of a renewable heating system under the Renewable Heat Premium Payment scheme, depending on your circumstances. More information on the RHPP is available at http://www.energysavingtrust.org.uk/Generating-energy/Getting-money-back/Renewable-Heat-Premium-Payment-Phase-2.
What’s the catch?
You must be able to show that your home has been properly insulated and draught-proofed before you can claim RHI payments, although solid-walled properties have special dispensation. A Green Deal assessment will identify what actions need to be taken to meet the requirements of the scheme.
The Renewable Heat Incentive (RHI) is a subsidy to encourage homeowners and business to invest in renewable heating technologies. But the start has been delayed again.
In the meantime you may be eligible to claim a grant of around 10% of the cost of a renewable heating system through the Renewable Heat Premium Payment scheme which has been extended until Spring 2014.
The Department of Energy and Climate Change now expects the Renewable Heat Incentive to be running from Spring 2014, with full details of how the scheme will operate to be revealed summer 2013.