The long awaited details of the World’s first Renewable Heat Incentive (RHI) were finally published on 10th March 2011 by the DECC. The new £860m Government scheme is expected to stimulate a new market in renewable heat, by increasing green capital investment by £4.5 billion up to 2020.
From October 2012, the RHI will guarantee long-term payments for the end user when installing renewable technologies on their property and will include all types of heating, from households to factories and public sector buildings. The tariffs, which will be annually adjusted with inflation, will be paid for 20 years to eligible technologies installed since 15th July 2009 with payments being made for each kWh of renewable heat produced.
Rates should give a 12% rate of return on the additional cost of using renewable heat, with the exception of solar thermal, which will give 5%. The end user can only claim cash-back through the RHI if the product and installer are both MCS approved. Solar Thermal Water Heating systems can also qualify for the RHI if they are certified under the Solar Keymark Scheme and installed by an MCS Approved installer.
As with the Feed-in Tariff Scheme, it is expected that the levels of support available for new entrants to the RHI will decrease over time as the costs of the equipment and installation reduce through economies of scale.
Premium payments for households in 2011
The RHI Tariff payments are due to start in 2012, however in the interim, up to 25,000 installations from July 2011 will be supported by a RHI Premium Payment to help people cover the purchase price of green heating systems. Details of how this can be claimed will we published in May 2011 and rates have been detailed as follows:
- Solar Thermal – £300/unit
- Air Source Heat Pumps – £850/unit
- Biomass boilers – £950/unit
- Ground Source Heat Pumps – £1250/unit
Households claiming this premium will be eligible for a RHI tariff from October 2012 when the Green Deal begins, as will anyone else who has had eligible equipment installed from July 2009. There will be clear criteria in order to qualify for the payment e.g. well insulated home based on its energy performance certificate, agreeing to give feedback on how the equipment performs, etc.
Further information on the Renewable Heat Incentive is available from the Department of Energy and Climate Change (DECC). Just call: 0300 060 4000 or visit their website: www.decc.gov.uk