UPDATE April 2022: The Renewable Heat Incentive (RHI) has now ended. If you are in England or Wales and live in an eligible property, you might be able to take advantage of the Boiler Upgrade Scheme (BUS), but for those of us not living in those areas, we hope there will be a replacement scheme announced by Government at some point. We’ll provide an update on this website whenever an update is available.
The Home Energy Scotland Loan has been introduced, so you can apply for that now if you want.
Industry has been lobbying Government for a number of years to get more support for renewable energy products such as ground source heat pumps and air source heat pumps because of the value we believe these products offer consumers and the overall positive impact they can have on the environment.
We were therefore delighted that on April 9th 2014, government confirmed the launch of the domestic Renewable Heat Incentive which provided exactly the support for heat pumps and renewable energy we had fought so hard for.
If you have an RHI query, please request a callback using the form on this website.
If you’re not quite ready to make that call, read on for more information or watch this helpful video from the helpful folks at The Green Age.
Table of Contents
What is the Renewable Heat Incentive (RHI)?
The Renewable Heat Incentive (RHI) is a financial support scheme for renewable heat. The scheme remains open for applications and is administered by the energy regulator Ofgem with the purpose of supporting and rewarding households who move away from fossil fuels for heating their homes.
Working in a similar way to the Feed-in-Tariff for solar photovoltaic (solar PV) systems, owners of heat pumps can be paid according to the total heat load of the property in kilowatt hours, for seven years tax-free.
It should be noted however that air to air heat pumps do not qualify for RHI payments.
What are the payment levels under the Renewable Heat Incentive (RHI)?
The amount of money you can receive under the Renewable Heat Incentive will be dependent on a number of factors including:
- Renewable technology installed (ground source heat pumps, air source heat pumps, solar thermal)
- Deemed heat load (the amount of heat likely to be generated by the renewable energy heating system)
The government assumes a 20 year lifetime for renewable heat technologies and has factored in the lifetime (i.e. 20 year) costs of operating the renewable heat system into the tariff values which are paid over 7 years. So, in effect, you are paid for 20 years of operation within a 7 year period.
An indication of the payments you could potentially receive can be viewed on our RHI Payments Table.
Participants will receive RHI payments quarterly in arrears for seven years. Tariffs will change annually in line with the Retail Price Index (RPI).
At the time of writing, the most recently updated tariffs published by Ofgem are for June 2020. Tariffs for air source heat pumps (10.85 p/kWh renewable heat) are significantly higher than the tariff available for biomass (6.97 p/kWh renewable heat. Tariffs for ground source heat pumps are much higher (21.16 p/kWh renewable heat), which is almost double the tariff for air source and is on a par with the solar thermal tariff.
The table below summarises these figures, which are also available on the Ofgem website where you can find out more about the scheme and how to apply.
| Air source heat pump | Biomass | Ground source heat pump | Solar thermal | |
|---|---|---|---|---|
| Tariff (p/kWh renewable heat)(Applications submitted between 01 July 2020 and 30 September 2020 incl.) | 10.85 | 6.97 | 21.16 | 21.36 |
If you have previously received public funding for your heat pump system, such as the Renewable Heat Premium Payment, this must be declared as part of the application process. This will then be deducted from RHI payments under the scheme. Initially, a deduction equal to one twenty-eighth of the value of the prior public funding received will be made from each quarterly payment.
Who is eligible to receive the Renewable Heat Incentive (RHI)?
The domestic RHI scheme will give financial support for an eligible renewable heating system that heats a single domestic property in Great Britain. The property can be on or off the gas grid. Payments will go to the owner of the system.
To help with the costs of installing a heat pump, the following groups will be eligible to apply for the domestic RHI (and all receive the same tariff):
- Owner occupiers
- Private landlords
- Registered social landlords
- Self-builders
- Third party owners of a heating system
Self-builders are defined as those who have built or commissioned a home for their own use, either by buildingthe home on their own or working with builders. Second homes are also eligible for the RHI. These are homes that are not a person’s main residence. Applicants for second homes will have to install metering equipment which will measure the amount of heat used.
New Build Properties – 183 Day Occupancy
The domestic RHI requires that if a property is occupied for less than 183 days, in a 12 month period, a heat meter must be installed to measure renewable heat use and determine payments, instead of payments being based on the annual heat demand specified on the property’s EPC.
This occupancy requirement ensures that the Domestic RHI delivers value for money for the taxpayer by not overpaying for renewable heat systems installed in properties that are not continuously occupied (for example, second homes).
This had resulted in the unintended consequence of eligible new self-builder properties having to wait 183 days prior to scheme application or installing heat meters as they are unable to provide evidence that they have lived in their homes for at least 183 days in the previous 12 months.
To overcome this, it was proposed that the regulations were amended to make eligible new build properties exempt from the 183 day occupancy requirement in the 12 months prior to application to the scheme. Thereafter, these participants would be subject to the standard ongoing obligations which included the annual declaration that the property had been occupied for 183 days or more in the last 12 months.
New build systems would not be eligible for the scheme. This meant properties in which the renewable heating system was installed before it was inhabited for the first time. This included applications from house builders and housing developers, as well as anyone who owned a new build property, including legacy applicants. The only exception was self-build homes (see above definition).
The renewable heat installation must be certified under the Microgeneration Certification Scheme (MCS). The installation will need to meet the MCS standards that applied at the time of installation, rather than the current standards.
All systems installed between 15th July 2009 and the launch of the RHI were eligible provided they met all the other criteria (referred to as “legacy applications”).
Other eligibility requirements of the Renewable Heat Incentive (RHI)
Before applying for RHI support, all applicants including legacy applicants needed to ensure that:
- A Green Deal Assessment (GDA) had been carried out to find out which energy efficiency measures were cost-effective for the property;
- Loft insulation (to 250mm) and cavity wall insulation had been installed where the measures were recommended by the GDA; and
- Where the GDA shows the required loft and cavity wall insulation was yet to be installed, an updated Energy Performance Certificate (EPC) was obtained following installation, as proof of installation (or valid evidence provided proving why installation was not feasible)
The only exception was for self-builders who built their property to current building regulations who simply needed to submit an EPC.
All applicants must agree that they are willing to take part in a metering scheme if their property is chosen by DECC as a property to be metered. There will be an extra incentive for applicants who install metering and monitoring service packages of £230 per year for heat pumps.
Legacy applications and the Renewable Heat Incentive (RHI)
Installations of heat pumps since 15th July 2009 were eligible for the RHI, subject to meeting all of the other RHI criteria. To manage the potentially large volume of legacy applications and avoid a backlog administrators were working with Ofgem to develop an approach to phasing legacy applications over a period of time after the launch of the scheme: that is, staggering the dates when legacy applicants could first apply for the scheme. The last date for submitting a legacy application was Wednesday 8th April 2015.
To find out what this could mean for you and your home contact us using one of the forms on this website.