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:

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.

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.

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

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