Further details on the renewable heat incentive (RHI) were announced on 12 July 2013 with the domestic RHI scheme planned to come into effect in Spring 2014, subject to parliamentary and state aid approval. The scheme pays financial support to those eligible for a period of 7 years with payments set at a rate per kWh of renewable heat. The payments are different for different water heating technologies with solar thermal and ground source heat pumps offering the greatest incentives and biomass and air source heat pumps getting less of an incentive.
The payments, which will be uprated in line with the Retail Price Index (RPI) are:
- Solar water heating panels (solar thermal) at least 19.2p/kWh – final figure to be announced in the Autumn
- Ground source heat pump 18.8p/kWh
- Biomass 12.2p/kWh
- Air source heat pump 7.3p/kWh
The final solar thermal RHI will be set by reference to the level of support offered to offshore wind.
The scheme is open to anyone in England, Scotland and Wales who has installed a renewable heating system on or after 15 July 2009. Payments will be made to the owner of the system subject to meeting certain criteria which include:
- All applicants must complete a Green Deal Assessment (GDA) before they apply and must meet the minimum requirements for loft and cavity wall insulation
- All systems must be certified under the MCS Scheme (Microgeneration Certification Scheme) and meet appropriate standards for the water heating technology used
- The scheme is open to single domestic properties but not new build (except self-build)
The payments will be calculated based on estimates :
- For heat pumps and biomass and heat pumps, estimates will be based on the figure of heat demand from an Energy Performance Certificate (EPC)
- For solar thermal systems (solar water heating panels), the estimate is based on the system performance completed as part of the Microgeneration Certification Scheme (MCS).
When the scheme starts, applications can be submitted to the OFGEM website. For legacy systems (systems installed between 15 July 2009 and the scheme start date) the application date will be staggered to avoid a backlog in processing applications. Details of these staggered applications will be announced in due course. New applications, submitted after the scheme start date, cam be made immediately.
This new scheme takes into account any payments under the Renewable Heat Premium Payment (RHPP) scheme. For those who have already taken advantage of the RHPP then deductions will be made to the quarterly RHI payments to recover the RHPP payments over the 7 year period of the new scheme. The RHPP scheme has also been extended until 31 March 2014, although given that these payments will now be deducted from RHI payments there is no major incentive to claim the RHPP. Applicants to RHI who have not claimed the RHPP will also be given priority in applying for the RHI.