Domestic Renewable Heat Incentive - Financial Support Explained

No access to the gas network and concerned about increasing heating oil prices? Have you looked at  a new heating system using a modern renewable energy source, or already installed one? You need to know about Government Schemes that could save - and even earn - meaningful amounts over the next few years.

The Renewable Heat Premium Payment, Renewable Heat Incentive,  Green deal and Eco funding -are they all about the pounds, shillings and pence?

Andy Louth of Groundtherm explains the latest round of Government financial support for renewable heat......

www.groundtherm.co.uk   Tel: 0161 451 0225 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

Phase 2 – Domestic Renewable Heat Incentive (RHI)

Details of the domestic RHI were announced by the Government on July 12, 2013. The document released sets out the final policy for the domestic RHI, subject to state aid and parliamentary approval.

Main Details of the Scheme:

The domestic RHI covers England, Wales and Scotland only.

It is a UK Government financial support scheme for renewable heat, targeted at, but not limited to, 'off gas grid' households. The Department of Energy & Climate Change (DECC) intends that the scheme will open to applications in spring 2014 and will be administered by Ofgem, whose guidance will be available before the launch of the scheme on how to apply and the information that will need to be provided.

The scheme will  cover single domestic dwellings and will be open to owner-occupiers, private landlords, registered providers of social housing, third party owners of heating systems and also self builders. It will be open to new build properties / self-build and existing dwellings.

On existing dwellings and renovations you will need an occupancy report, which will be part of an energy performance certificate (EPC) that will show how much energy the building uses. This will also be a part of a 'green deal assessment', which will highlight on existing buildings what measures may need to be taken for the property to qualify for the RHI. This is because in a poorly insulated building, the source of renewable heat (Biomass/Heat pump, etc) would be running more continuously to heat the building, meaning you would be claiming the RHI tariff more often, which is not what the government wants. A poorly insulated building will also be using more energy, which is what the government is trying to prevent, (energy loss).

So measures to improve insulation that may be advised might include for instance, cavity insulation / loft insulation/thermostatic valves on radiators/ external and internal insulation etc. Apart from the Green deal/EPC assessment, I would advise a heat loss calculation (HLC)on the building, which will size the heating demand of the building more accurately than a Green deal assessment. But you will still need the green deal assessment to qualify for a renovation or existing dwelling.

Although the RHI will be open to projects undertaken since  July 15 2009 (legacy applications), the date such applications can be submitted may not be from when the scheme first opens and will be phased over time. This is to help manage the potentially large volume of applications submitted when the scheme opens and to avoid a backlog. There will be further phasing details provided prior to the launch from Ofgem. Please check the website at www.ofgem.gov.uk

The financial support will be made at set rates per unit of renewable heat produced (kilowatt hour or kWh) for a seven years period, to the owner of the heating system.

This RHI scheme will support Ground source heat pumps, Air source heat pumps, Solar thermal and Bio mass.

For Biomass, the renewable heat generated will be based on an estimated figure of heat demand from an Energy performance Certificate (EPC).

With Heat pumps, air source heat pumps (ASHP) and ground source heat pumps (GSHP) the renewable heat generated will based on an estimate of the heat demand from an EPC combined with an estimate of the heat pump’s efficiency.

For solar thermal systems, the renewable heat generated will be based on the estimate of system performance completed as part of an Microgeneration Certification Scheme (MCS) installation.  

 To help improve the performance of renewable heating systems, there will be an extra incentive for applicants who have installed metering and monitoring packages; this will be of £230 per year for heat pumps and £200 per year for Biomass boilers. The legacy of Biomass boilers between July 15, 2009 and the launch of the scheme in spring 2014 will not need to meet the emissions limits requirement. Also any public grants received, including the renewable heat premium payment (RHPP), will be deducted to avoid a double subsidy and tariffs will change annually in line with the retail price index (RPI),This means there could a possibly be a slight system degression to control the costs of the scheme?? DECC was expected to announce this in autumn 2013.

One of the key objectives of the scheme is to increase significantly the level of heat generated from renewable energy sources in Great Britain and thereby enable the UK to meet its binding targets to generate 15% of our energy from renewable sources by 2020.

It is estimated that the RHI could save up to 44 million tonnes of carbon (MtCO²) by 2020 (37 MtCO² outside the EU(ETS) and 7 MtCO² inside the EU(ETS). This works out as a saving of one million tonnes of carbon in the first carbon budget period (2008-2012), 14 million tonnes in the second carbon budget period (2013-2017) and 52 million tonnes in the third budget period (2018-2022).

With all the programs put in place I do feel that this time the RHI is actually going to happen, but don't hold your breath. If it does come about, it is a true way of getting your investment back sooner, possibilities of 6-8years which is better than an ISA! If you want to visit any of the websites for the DECC/Energy savings trust/ Ofgem/or Gem serve please do, as they are all very informative.

www.groundtherm.co.uk

Tel: 0161 451 0225 or email This email address is being protected from spambots. You need JavaScript enabled to view it.