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What is the Renewable Heat Incentive? (RHI) Everything you Need to Know…

 

What is the Renewable Heat Incentive? (RHI) Everything you Need to Know…

The Renewable Heat Incentive (RHI) is a government financial incentive to encourage the use of renewable heat. Available to both domestic and non-domestic environments, The Renewable Heat Incentive promotes the use of renewable heating systems, with a financial incentive for those who switch to heating systems that use eligible energy sources and meet certain criteria.

With the UK Government’s RHI Scheme, you could get money towards the costs of heating your home or commercial property using a renewable heating system, including the likes of: Biomass Systems, Heat Pumps and Solar Thermal Heating Systems etc.

The Renewable Heat Incentive allows people who sign up to the scheme and follow the rules of the incentive to receive quarterly payments for seven years, if you are applying for Domestic RHI, and 20 years for Non-domestic RHI, for the amount of renewable, clean heat their renewable heating system produces. The scheme has seen a significant amount of success, with thousands of people signed up and receiving payments.

In the below article we provide you with the complete guide to the Renewable Heat Incentive and take a look at what exactly RHI is.

 

 

So, What Exactly Is RHI?

The Renewable Heat Incentive is a government-funded financial incentive to encourage the use of renewable heating systems. The Renewable Heat Incentive is available to both domestic environments (Domestic RHI) and commercial environments (Non-Domestic RHI).

With RHI, you can receive quarterly payments for up to seven years, or 20 years for the non-domestic scheme, for the amount of renewable and clean heat your renewable heat system provides, essentially reimbursing you for choosing a renewable heating system over a conventional heating system. The Renewable Heat Incentive’s ultimate goal is to see more people make the switch to heating systems that use eligible energy sources that can help the UK to reduce it’s carbon emissions and meet the nation’s renewable energy targets.

The Renewable Heat Incentive was introduced by the UK Government’s Department for Business, Energy & Industrial Strategy (BEIS) and is administrated by energy regulator Ofgem E-Serve.

 

When Was The Renewable Heat Incentive Started?

The Renewable Heat Incentive was first introduced on the 28th of November 2011, replacing the Low Carbon Building Programme, a similar payments system which was closed in 2010. The UK Government confirmed its support for the RHI scheme in the October 2010 Spending Review and published details of the scheme on the 10th of March 2011. When The Renewable Heat Incentive was first introduced, RHI cash payments were paid to owners who installed renewable heat generation equipment in non-domestic buildings: Non-domestic RHI.

The RHI scheme was later extended to domestic buildings (Domestic RHI) on the 9th of April 2014, after a series of delays which included setting out the Domestic RHI tariff levels.

 

Two Renewable Heat Incentive Schemes: Domestic & Non-domestic

The Renewable Heat Incentive is split in to two separate schemes: Domestic RHI for domestic environments, and Non-domestic RHI for commercial environments. Both schemes have separate tariffs, joining conditions, rules and application processes, and both are administrated by Ofgem.

It is important to note that you can only apply to one of the schemes, not both. Ofgem have a detailed Domestic or Non-domestic factsheet for those who are not sure which scheme to apply to.

 

How Does The Renewable Heat Incentive Work?

The Renewable Heat Incentive is mostly straight forward. Firstly, the user, whether Domestic or Non-domestic, will pay for and install an eligible renewable heating system. Eligible systems include: Biomass boilers, air source heat pumps, ground source heat pumps and more. A complete guide to which renewable heating systems are eligible for RHI can be found in section 3 of Ofgem’s Essential Guide for RHI Applicants.

Once a system has been installed, and as long as it meets the requirements of the application process for the RHI scheme (further detailed below), you can then register the system with Ofgem who administer the scheme.

Once your application has been approved by Ofgem, you will then be eligible to receive quarterly Renewable Heat Incentive payments for up to 7 years for the domestic scheme and 20 years for the non-domestic scheme. How much your payments are will depend on a number of factors, including but not limited to: the amount of heat generated, the technology type, and also inflation.

Note that the application process will differ depending on whether you are applying for the Domestic or Non-domestic Renewable Heat Incentive.

RHI payments are designed to cover the difference in costs between the installation cost of a conventional heating system and the installation cost of a renewable heating system, as well as the running costs of a renewable system and any interest charged by finance providers, ultimately encouraging the use of greener technology.

Once the incentive period is up, the costs of choosing a renewable heating system instead of a conventional heating system should have been fully reimbursed to the user.

It is important to note that under the Domestic Renewable Heat Incentive, householders are eligible to receive payments for just one heating system per property. Although homeowners can also file applications for space heating systems and separate solar thermal water heating systems.

 

Recent Changes To The Domestic RHI Scheme

The RHI scheme is ever-evolving and its policies periodically reviewed by the government, whether that be changes to tariffs, updated rules, or changes to the application process.

Some recent changes to the Domestic Renewable Heat Incentive scheme include:

  • On the 22nd of May 2018 new changes were implemented to the Domestic RHI scheme which included metering for performance for heat pumps, new Metering and Monitoring Service Package (MMSP) payment schedules and enforcement powers, assignment of rights, revised degression thresholds, as well as extending the RHI’s budget management mechanism until the end of 2020/21.
  • Changes to the Domestic RHI Regulations, made effective from the 31st of July 2017, reflected the latest version of the Microgeneration Certification Scheme (MCS) installation standard for heat pumps.

A full time line of recent changes to the Domestic RHI scheme can be found on the Ofgem website.

 


Want To Find Out More About The Renewable Heat Incentive? 

If you would like to find out some more information about the Renewable Heat Incentive or any of our renewable heating systems and technology, then please get in touch today. You can get in touch by using our contact form, by emailing us at: info@agreeneralternative.co.uk or by calling us on 01273 455 695.


 

Recent Changes To The Non-domestic RHI Scheme

The Non-domestic RHI scheme is also subject to updates and changes. For example, in October 2018 the scheme was changed with new regulations allowing participants to replace their accredited installation, change the circumstances under which “estimated data” can be submitted, as well as introducing requirements regarding environmental permits.

A full time line of recent changes to the Non-domestic RHI scheme can be found on the Ofgem website.

 

Who Is The Renewable Heat Incentive For? Who Can Apply For RHI?

The Renewable Heat Incentive is for homeowners or commercial properties depending on whether you are applying for the Domestic RHI scheme or the Non-domestic RHI scheme.

In order to apply for the Domestic RHI scheme, you must be the homeowner and you must have an eligible renewable heating system installed which is MCS certified. You must also prove that your property is considered domestic by providing your Energy Performance Certificate (EPC).

In order to apply for the Non-domestic RHI Scheme, you must have an eligible renewable heating system installed on your commercial property which was first commissioned on or after the 15th of July 2009. You will also need to prove that your heat is being used for “eligible purposes”.

 

Would Your Home Qualify For The Renewable Heat Incentive?

As long as you are the homeowner, private landlord, or social landlord and have an eligible MCS-certified renewable heating installation, which you also own, you will be able to qualify for the Domestic RHI scheme. You will however need to prove your property is considered domestic by providing your Energy Performance Certificate (EPC).

 

Would Your Business Qualify For The Renewable Heat Incentive?

In order to qualify for the Non-domestic RHI scheme you must be the owner of the installation, or where there are multiple owners you must be able to prove that you have permission to act for the other owners. Your installation must have been first commissioned on or after the 15th of July 2009 to be eligible, and the system must have been new at the time of installation.

The system must either use liquid or steam as the heat delivery medium, and the system must provide heat for at least one eligible heat use. The installation must not solely provide heating to single domestic premises.

No public grants can be used to fund any part of the installation unless it has been repaid.

 

Does Your Home Or Business Need To Be On The National Gas Grid?

No, the Renewable Heat Incentive scheme applies to homes and businesses both off and on the gas grid.

 

How Much Can You Claim From The Renewable Heat Incentive?

With The Renewable Heat Incentive Scheme you can claim quarterly payments for up to 7 years for the domestic scheme and up to 20 years for the non-domestic scheme. These payments are supposed to cover the difference in costs between the installation cost of a conventional heating system and the installation cost of a renewable heating system, as well as the running costs of a renewable system and any interest charged by finance providers, ultimately encouraging the use of greener technology.

 

How Much Are The Renewable Heat Incentive Payments?

How much your quarterly RHI payments are will vary depending on whether you are on the Non-domestic RHI scheme or Domestic RHI. How much your payments are will also depend on the amount of heat your system generates, as well as the tariff rate for your specific renewable heating system.

You can work out what payments you could receive from the Domestic RHI Scheme by using the government’s Domestic RHI Calculator.

In order to work out how much your quarterly payments could be with the Non-domestic RHI scheme, then you can use the below tariff tables to work out how much you could receive per kilowatt hour of energy your system produces

 

What Are The RHI Tariffs?

RHI Tariffs set the rate for your Renewable Heat Incentive payments. People who join the scheme and stick to its rules receive quarterly payments over seven years for the domestic scheme and 20 years for the non-domestic scheme. The tariffs are set by the Department for Business, Energy and Industrial Strategy (BEIS).

 

Domestic RHI Tariffs – The below Domestic RHI tariff table shows the technologies that are eligible for Domestic RHI and the rate for each technology.  As you can see, The RHI provides a big incentive for owners to invest in ground source heat pumps and solar thermal renewable heat technologies. The tariffs are based on pence/kWh of renewable heat delivered.

RHI Domestic
paid over 7 years
p/kWh
from Jan 2015
p/kWh
from Apr 2015
p/kWh
from Jul 2015
p/kWh
from Oct 2015
p/kWh
from Jan 2016
p/kWh
from Apr 2016
p/kWh
from Jul 2016
p/kWh
from Jan 2017
p/kWh
from Apr 2017
p/kWh
from Jul 2017
p/kWh
from Oct 2017
p/kWh
from Apr 2018
p/kWh
from Apr 2019
Solar thermal 19.2 19.51 19.51 19.51 19.51 19.74 19.74 19.74 20.06 20.06 20.06 20.66 21.08
GSHPs 18.80 19.10 19.10 19.10 19.10 19.33 19.33 19.55 19.86 19.86 19.86 20.46 20.87
ASHPs   7.3 7.42 7.42 7.42 7.42 7.51 7.51 10.02 10.18 10.18 10.18 10.49 10.70
Biomass 10.98¹  8.93  7.14  6.43  5.14  5.20  4.68  6.44  4.28  3.85  6.54  6.74  6.87

 

Non-domestic RHI Tariffs – The below Non-domestic RHI tariff table shows the technologies that are eligible for Domestic RHI and the rate for each technology. The Non-domestic RHI also provides a big incentive for owners to invest in ground source heat pumps and solar thermal renewable heat technologies. The tariffs are based on pence/kWh of renewable heat delivered.

RHI
Commercial
paid over 20 years
p/kWh
from 1 Jan 2015
p/kWh
from 1 Apr 2015
p/kWh
from 1 Jul 2015
p/kWh
from 1 Oct 2015
p/kWh
from 1 Jan 2016
p/kWh
from 1 Apr 2016
p/kWh
from 1 Jul 2016
p/kWh
from 1 Oct 2016
p/kWh
from 1 Jan 2017
p/kWh
from 1 Apr 2017
p/kWh
from 1 Jul 2017
p/kWh
from 1 Oct 2017
p/kWh
from 1 Apr 2018
p/kWh
from 1 Apr 2019
Solar thermal 10.0 10.16 10.16 10.16 10.16 10.28 10.28 10.28 10.28 10.44 10.44 10.44 10.75 10.97
GSHPs 8.7 8.84 8.84 8.84 8.84 8.95 8.95 8.95 8.95 9.09 9.09 9.09 9.36 9.55
ASHPs 2.5 2.54 2.54 2.54 2.54 2.57 2.57 2.57 2.57 2.61 2.61 2.61 2.69 2.74
Biomass 6.8 5.87 4.40 4.18 3.76 3.62 3.26 3.10 2.91 2.85 2.71 2.96 3.05 3.11

 

What Technologies Can You Claim RHI For?

The Renewable Heat Incentive covers a wide variety of renewable heating technologies, from Biomass boilers to air and ground source heat pumps. But it is important to know that there are some limitations.

For The Domestic Renewable Heat Incentive it is important to note that space heating must be delivered by a liquid medium, such as a radiator. Domestic hot water heating means hot water used for purposes other than space heating or heating a swimming pool.

For the Non-domestic Renewable Heat Incentive, it is important to note that the technology must use either liquid or steam as the heat delivery medium.

You can discover the complete list of eligible renewable heating technologies for the Domestic RHI scheme here.

You can discover the complete list of eligible renewable heating technologies for the Non-domestic RHI scheme here.

 


Is Your Renewable Heating System Eligable For RHI? 

If you would like to find out wheter your existing renewable heating system is eligable for RHI then get in touch with A Greener Alternative today. You can get in touch by using our contact form, by emailing us at: info@agreeneralternative.co.uk or by calling us on 01273 455 695.


 

When Does The Renewable Heat Incentive End?

The Renewable Heat Incentive scheme is due to end on the 31st of March 2021. The Government has not announced how it will encourage low carbon heating after the 31st of March 2021. RHI will continue to be paid for installations completed and commissioned before 2021. After the 31st of  March 2021 new installations may not receive any form of subsidy.

 

How Can You Apply For RHI?

The process of applying for the Renewable Heat Incentive will vary depending on whether you are applying for Domestic RHI or Non-domestic RHI.

 

Applying For Domestic RHI

In order to apply for Domestic RHI you will first need an eligible renewable heating system installed by an MCS certificated installer, before completing Ofgem’s Domestic RHI application form. To fill in the Domestic Renewable Heat Incentive form you will need the following:

  • Your Microgeneration Certification Scheme (MCS) certificate number. Your MCS certificate should have been issued to you by your MCS certified installer. All renewable heating systems in the Domestic RHI must be certified by MCS. Double check with your installer if you don’t have your MCS certificate.
  • Your Energy Performance Certificate (EPC) number. If you do not have a copy of an EPC for your property, you may be able to access a copy online, if one already exists. If no EPC already exists, then one can be requested from an accredited Domestic Energy Assessor. An EPC number is required as part of the application process for Domestic RHI to determine whether the property can be considered domestic, whether required loft and cavity wall insulation measures have been installed, and to determine the heat demand figure used for the payments calculation for non-metered biomass and heat pump applicants.
  • Your personal information and bank details so that payments can be made. Make sure that the name and personal details you use for your application are the same as on your bank account.

 

Applying For Non-domestic RHI

The application process for the Non-domestic Renewable Heat Incentive requires a little more information. It’s essential for you to prepare in advance of your Non-domestic RHI application to make sure it all goes smoothly. By gathering all of the supporting evidence needed for the application and preparing your answers, you will help to make the application process run as smoothly as possible.

The Non-domestic Renewable Heat Incentive can be applied for via the Ofgem website. In order to apply for the Non-domestic Renewable Heat Incentive, you will need to gather a number of documents and evidence to support your application. This documentation and evidence applies to several areas, and will include:

  • Proof that the installation is of an eligible renewable heat technology type and size.
  • Proof that the installation was completed and first commissioned on or after the 15th of July 2009, and that the heat is used for “eligible purposes”. Note that using heat outside of a building has very limited eligible application but can be appropriate in certain circumstances.
  • For certain installations under 45kWh in capacity, you will need to provide a valid MCS accreditation certificate.
  • It is also important to know that if you received public grant money towards the installation costs of your renewable heating system then you will not be eligible for the Non-domestic RHI scheme, except under very specific circumstances.

The complete list of evidence and documents required can be found in the Easy Guide to Applying.

Similar to the Domestic RHI application process, personal information and bank details so that payments can be made will be required.

Other things to note for your Non-domestic Renewable Heat Incentive application:

  • It is asked that the authorised signatory completes the application form personally.
  • The name and personal details you use for your application need to be the same as the bank account you’re using.
  • Applications should be complete. Incomplete applications will result in delays.
  • Schematic diagrams need to be of high quality.
  • Ensure that you enter the installation capacity as MW instead of kW.

 


So there we have it! A Greener Alternative’s complete guide to the Renewable Heat Incentive scheme.

If you would like to find out some more information about the Renewable Heat Incentive, whether you’re a domestic or non-domestic client, then A Greener Alternative are here to help. A Greener Alternative have years of experience installing renewable energy systems and integrated heating solutions across Sussex and the South-East. If you would like to find out some more information about RHI or any of our renewable heating systems and technology, then please get in touch today. You can get in touch by using our contact form, by emailing us at: info@agreeneralternative.co.uk or by calling us on 01273 455 695.


 

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