Renewable Heat Incentive Scheme
The Renewable Heat Incentive (RHI) is a cash payment scheme which pays for every unit of heat generated through renewable sources, in a similar way to the Feed-in Tariff but limited to heat generating technologies such as Air Source Heat Pumps and Ground Source Heat Pumps or Solar Thermal Panels. The domestic tariff is guaranteed for 7 years and will rise in line with the consumer price index (CPI). The commercial tariff, which was introduced in 2011, is guaranteed for 20 years.
Domestic Renewable Heat Incentive – Continues until March 2022
WDS Green Energy welcomes the Government confirmation of the continuation of the Domestic RHI until at least 31 March 2022. The Non-Domestic RHI is still due to close to new applications on 31 March 2021. The current tariff levels for the domestic and non-domestic RHI are as follows:
| Domestic RHI | RHI tariffs pence/kWh | Tariff lifetime |
|---|---|---|
| Ground and water source heat pumps | 21.16 | 7 years |
| Air source heat pumps | 10.85 | 7 years |
| Non-domestic RHI | RHI tariffs pence/kWh | Tariff lifetime |
|---|---|---|
| Ground and water source heat pumps | Tier 1: 9.56 Tier 2: 2.85 |
20 years |
| Air source heat pumps | 2.75 | 20 years |
As of September 2017, the Government introduced a cap on the amount of renewable heating generation above which Domestic RHI will not be paid:
- The cap for ASHP installations is 20,000 kWh per annum. This would still return £1,514 a year for 7 years, a total of £10,598 (based on a seasonal coefficient of performance (SCOP) of 3.9)
- The cap for GSHP installations is 30,000 kWh – up to £4,469 a year for 7 years, a total of £31,283 (based on a seasonal coefficient of performance (SCOP) of 4.0)
How the renewable heat incentive is calculated
The domestic RHI tariff is paid per kWh (kilowatt hour) of renewable heat generated from the system for seven years, capped at 20,000kWh for air-source systems and 30,000kWh for ground source systems.
Tariffs are estimated, rather than metered, and for heat pumps the calculation will use a heat demand figure based upon the property’s Energy Performance Certificate (EPC) combined with a calculation about efficiency (SCOP).
Tariffs for heat pumps will only be paid on the renewable portion of the delivered heat because heat pumps use electricity to generate heat. The efficiency will be based upon the seasonal co-efficient of performance (SCOP) of the system.
Solar Thermal tariffs will be based on the system performance estimates from the MCS certification which is generated on completion of the system.
- Example – Ground Source Heat Pump installed in a typical 4 bedroom house
Total annual Energy demand (taken from the EPC) = 25,000kWh
GSHP seasonal co-efficient of performance (SCOP) of 4.0
GSHP tariff: 19.86p kWh
Eligible heat demand = 25000kWh x (1-1/4.0) = 18,750kWh
Total annual RHI payments = 18,750 x 19.86 = £3,723.75
RHI paid over 7 Years = £26,066.25 - Example – Air Source Heat Pump installed in a typical 4 bedroom house
Total annual Energy demand (taken from the EPC) = 18,000kWh
ASHP seasonal co-efficient of performance (SCOP) of 3.9
ASHP tariff: 10.18p kWh
Eligible heat demand = 18,000kWh x (1-1/3.9) = 13,385kWh
Total annual RHI payments = 13,385 x 10.18p = £1,362.59
RHI paid over 7 Years = £9,538.15
The commercial (or non-domestic) RHI tariff provides financial support for the lifetime (20 years) of the qualifying installation. Payments are made quarterly and are based upon the actual heat output of the system i.e. the system is metered. An Eligible Heat Output (EHO) figure in kWh is calculated through the provision of meter readings at three monthly intervals. This is the amount that will be multiplied by the tariff rate to determine the payment amount.
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Frequently asked questions
- What types of scheme are there?
There are two types of Renewable Heat Incentive, the commercial or non-domestic scheme and the domestic scheme.
The domestic RHI scheme began on 9th April 2014.
The commercial RHI opened to all eligible non-domestic installations in November of 2011. Air source heat pumps were added to the commercial RHI on 28th May 2014. - How does it work?
For Domestic Installations:
An MCS accredited installer, such as WDS Green Energy, installs an eligible technology in your property. Eligible technologies include solar thermal systems, ground source heat pumps and air source heat pumps.
Certain insulation standards, such as a minimum of 250mm loft insulation and cavity wall insulation (if applicable), must be met to be eligible for the payments.
An Energy Performance Certificate (EPC) must be generated.
An estimate of the amount of renewable heat generated will be made. This is based upon the efficiency of the pump and the energy demand figures in the EPC.
A fixed amount is then paid based upon the calculated estimate. This is paid for seven years and is adjusted in line with the Consumer Price Index (CPI) (for systems installed before April 2016, tariff is adjusted in line with the Retail Prices Index (RPI)).
If the heat pump system doesn’t serve the whole of the property’s heat demand, payments will be made against metered usage of the system, rather than the EPC estimate.For Commercial Installations:
An MCS accredited installer, such as WDS Green Energy, installs an eligible technology in your property. Eligible technologies include solar thermal systems, ground source heat pumps and air source heat pumps.
Heat and electric metres will need to be installed to measure the amount of renewable heat the system actually produces.
Quarterly Meter Readings are taken and payment is made against those readings.
Periodic usage reviews will be undertaken to ensure heat is not being wasted. - Am I Eligible?
All domestic air source and ground source heat pumps or solar thermal installations of MCS accredited products installed after 15th July 2009 by MCS registered installers such as WDS Green Energy should be eligible for RHI payments.
The Owners of the system whether in an existing home or a new build, self built property will be eligible. This includes privately owned homes, second homes, private landlords, social landlords, self build new homes and third-party owned systems. - What do I need to do?
You will need to ensure your installation is MCS approved. This means using an MCS accredited installer, such as WDS Green Energy, who will only use products that have passed the rigorous quality standards of the Microgeneration certification scheme (MCS)
You will need an Energy Performance Certificate (EPC), which will be used to calculate your renewable heat and identify any required improvements to the property
WDS Green Energy are an MCS accredited installer who can arrange for an assessor to visit your property for the purpose of obtaining an EPC. We will also help you complete any relevant paperwork. - How do I receive the payments?
Domestic RHI payments will be paid quarterly for seven years and the tariff will change annually in line with the Consumer Price Index (CPI). Tariffs for new applicants may decrease subject to the budget management mechanisms set by the Government.
Those applicants who received public funding from other schemes will need to declare this on their application, and a small percentage of this amount will be deducted each year from the tariff they receive. - Is there anything else I need to know?
There is a ‘Metering and Monitoring Service Package’ which domestic RHI recipients can volunteer for. The data collected under this scheme is shared by DECC with the installer and the consumer and RHI recipients who volunteer will receive £230 per year to have their heat pump installation monitored. To be eligible to receive the annual sum the system will need to be serviced annually in accordance with the manufacturers instructions to ensure it runs efficiently. - Back to Top
For further information and details about the Renewable Heat Incentive scheme and how it can benefit your home or business please visit GOV.UK and the ofgem websites
