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Renewable Heat Incentive

Renewable Heat Incentive (RHI) Explained

The tariff levels and terms for the scheme proposed are the subject of a long-awaited announcement; the initial proposals for a renewable heat incentive scheme were made on 14th July in 2009 under the previous Government and the non-domestic scheme started in 2011. After much change in the RHI, with several consultations, sets of proposals, and reviews in between then and now, this set of final outcomes and tariffs for the domestic scheme provides some of the certainty required by industry prepare for implementation. Both the domestic scheme and the new tariffs proposed for the non-domestic scheme will come into implementation together in spring 2014.

  • The non-domestic RHI scheme was introduced by the Coalition in 2011
  • Renewable Heat Premium Payment (RHPP) voucher scheme for domestic renewable heat installations, is an interim measure while the details of the delayed domestic scheme were finalised - and is still current until March 2014.

RHI Tariffs

The tariffs are calculated on the basis of a 7.5% return over 20 years being paid over a 7 year period. Whilst the calculation has been based to provide the best results in a non gas area, the scheme is available throughout the UK in both on and off gas areas.Tariff (p/kWh)

  • Payments are made quarterly in arrears for 7 years.
  • Tariffs will change annually with RPI.
  • Degression will be imposed on reaching published targets.
  • Applicants may apply for tariff support on solar thermal installations in conjunction with any other qualifying technology.

RHPP will reduce payments. Initially, a deduction equal to one twenty-eighth of the value of the prior public funding received will be made from each quarterly payment. However, where tariffs are altered in line with RPI, the quarterly deduction will also change by the same proportion, so that the overall value of the deduction remains const

Who is eligible for domestic RHI?

  • Owner occupiers
  • Private landlords
  • Social landlords
  • Third party owners
  • Self builder

What else is required?

  • Microgeneration Certification Scheme (MCS) will be required for both the product and the installer.
  • All installations (including legacy applications) will require a Green Deal Assessment other than Self Builders who will only require an EPC.
  • Loft (250mm) and cavity insulation must be installed, where recomended.
  • All installations (other than solar thermal) must be ‘meter ready’.
  • Legacy qualifying installs from 15/7/09.
  • Performance will be deemed except:

Hybrid systems will require metering to guarantee that only renewable heat is rewarded. Those volunteering for metering where an incentive will be paid (£230 pa HP, £200 Biomass). An audit selection by DECC who will pay for the cost of metering Second homes

Heat Pumps

Technology & Calculations

  • Air Source (ASHP)
  • Ground Source (GSHP)

There is a minimum Seasonal Performance Factor (SPF) of 2.5. The efficiency will be calculated by the MCS accredited installer, and based upon the star-rated system currently used by the Heat Emitter Guide.Payments will only be made on ‘renewable heat’ recognising the energy required to power the device.


Technology & Calculations

  • Biomass-only boilers covering all solid biomass, including logs and chips
  • Biomass pellet stoves with back boilers
  • Biomass condensing on eligible pending testing list (to be proven)

All heat qualifies; the payments will be based on the estimated heat use from the EPC. Air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx) apply. Installations must not exceed the limit of 30grams per gigajoule net thermal input for PM, and 150g/GJ for NOx. If Air Quality standards change after an application has been accepted onto the RHI, new standards will not be retroactively applied.Biomass Fuel needs to be sourced from a supplier registered on an approved supplier list. Biomass systems will be required to make an annual declaration that they are purchasing fuel only from approved suppliers. For both the non domestic and domestic RHI schemes, and Approved Supplier list will be established which include suppliers who both: supply fuel which complies with the greenhouse gas lifecycle emissions target of 60% savings against the EU fossil fuels average (assuming the boiler efficiency is 70%); and report against the relevant land criteria for their respective fuels. These criteria for suppliers will apply from April 2014.Example of payment calculation – for illustrative purposes only, not intended to be representative

Solar Thermal

Technology & Calculations

  • Flat plate
  • Evacuated Tube

-Solar thermal can be installed with any other technology and both tariffs can be claimed.

All Heat Qualifies

The deeming figure for solar thermal will be the estimated contribution of the solar thermal system to the property’s hot water demand (in kWh) that is calculated as part of the MCS installation process and shown on the MCS certificate. The tariff is capped by reference to the level of offshore wind. The announcement on the final tariff will be made in the Autumn.

Did you know?

Putting right the misconceptions of renewable heating & energy

Heat Pumps

Heat pumps cannot be used to produce both heating and hot water

Many heat pumps can provide both heating and hot water but it is true to say that the higher the temperature of the water demanded then the less efficient the device becomes. Some people may opt for hybrid systems which retain the original boiler to cater for the most extreme demands and allow the heat pump to carry out the vast majority of the work.

Installers need F – Gas accreditation to fit heat pumps

Most domestic heat pumps have hermetically sealed refrigeration circuits which do not need to be altered in any way during installation and therefore, F-Gas certification is not required.


All the pellets come from overseas

Plumb Center’s biomass wood pellets come from UK sourced base materials.


The renewables market is not significant enough

The markets projections from DECC in their Impact Assessment for the RHI are detailed below showing 745,000 installations by 2021.




Renewable Heat 


The RHI will only be available in off gas grid areas

The RHI will be available anywhere in the UK, although a slightly different scheme is being introduced in Northern Ireland. The confusion may be related to the following Issues:

  • The RHI tariffs have been calculated to offer the best value in off gas situations
  • The RHPP rewards installations of heat pumps and biomass in off gas areas although Solar Thermal can be fitted anywhere.


The RHI will only be available in off gas grid areas

In most cases installing solar panels on domestic property is likely to be considered ‘permitted development’ with no need to apply to the council for planning permission. This is subject to the following conditions and not including conservation areas or listed buildings:Panels on a building should be sited, so far as is practicable, to minimise the effect on the external appearance of the building and the amenity of the area. When no longer needed for microgeneration panels should be removed as soon as reasonably practicable. Panels should not be installed above the highest part of the roof (excluding the chimney) and should project no more than 200mm from the roof slope or wall surface. The panels must not be installed on a building that is within the grounds of a listed building.

Heat Pump 


Planning permission is always required for heat pumps

Air source heat pump installations In Wales and Northern Ireland require planning permission. The installation of a ground source heat pump or a water source heat pump on domestic premises in England and Scotland may be considered to be permitted development, not needing an application for planning permission. From 1 December 2011 the installation of an air source heat pump on domestic premises is considered to be permitted development, not needing an application for planning permission, provided ALL the limits and conditions listed below are met

  • Development is permitted only if the air source heat pump installation complies with the Microgeneration Certification Scheme Planning Standards or equivalent standards.
  • The volume of the air source heat pump’s outdoor compressor unit (including housing) must not exceed 0.6 cubic metres.
  • Only the first installation of an air source heat pump would be permitted development, and only if there is no existing wind turbine on a building or within the curtilage of that property. Additional wind turbines or air source heat pumps at the same property requires an application for planning permission.
  • All parts of the air source heat pump must be at least one metre from the property boundary.
  • Installations on pitched roofs are not permitted development. If installed on a flat roof all parts of the air source heat pump must be at least one metre from the external edge of that roof.

The Energy Saving Trust

Department of Energy & Climate Change


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