Renewable Heat Services - Affordable heat, sustainable future

Renewable Heat Incentive (RHI) - Update

Posted: Friday, 22 Jul, 2011 - 17:10

Renewable Heat Incentive (RHI) - update

On 24 June 2011 Ofgem published detailed guidance on accreditation and eligibility for the Renewable Heat Incentive (RHI) scheme.

The RHI is a new government scheme designed to encourage the uptake of renewable heat. The scheme is the first of its kind in the world and will provide £860 million of subsidy between 2011 and 2015, more than double the amount of funding allocated to the Feed in Tariff Scheme.

Tariffs will be paid on the basis of the metered heat produced by eligible installations. The tariffs have been calculated to provide a return on the additional capital invested of 12 per cent. Tariff rates will be adjusted every year in accordance with the UK Retail Price Index and will continue for up to 20 years from the date of accreditation. The RHI will be introduced in two phases. It is expected that support will be available to eligible installations from September 2012.

For the latest technology high temperature Air Source Heat Pumps (ASHP) used for heating buildings and hot water production, the Return on Investment when replacing natural gas will be about 12%, but when replacing oil, electric heating or LPG, will average 40%.

There is a comprehensive review being undertaken by the Department of Energy and Climate Change (DECC) on the relative performance, efficiencies and operating temperature window of the various accredited ASHPs. This will be completed for September 2012, and the RHI grants will then commence to be paid.

All heat pump systems installed by us, Renewable Heat Services, since August 2009 are eligible and will qualify for the Renewable Heat Incentive. The grants for the installations completed before the commencement of RHI payments will have their 18 years of payments commencing from late 2012.