The Domestic Renewable Heat Incentive (Domestic RHI) is a government financial incentive to promote the use of renewable heat. Switching to heating systems that use eligible energy sources can help the UK reduce its carbon emissions and meet its renewable energy targets.
People who join the scheme and stick to its rules receive quarterly payments for seven years for the amount of clean, green renewable heat it’s estimated their system produces.
An application requires a MCS certificate, issued by Better Planet, certifying that the installation has been done in line with the MCS (Microgeneration Certification Scheme) standard and that an MCS accredited heat pump has been installed. Another document required for the application is a recent EPC (Energy Performance Certificate) for the property.
In order for an application to be successful, some eligibility criteria have to be met. Two of these are that the property must have loft and cavity wall insulation if technically possible.
All existing dwellings can qualify. For new builds, only self builds (built or funded by the first occupant) are eligible.
Tariffs are paid quarterly over seven years and they are based on the heat generated by the heat pump (measured in kWh). If the heat pump is the only source of heat (mono valent) the heat generated by the heat pump is deemed in line with the estimate for space heating and hot water in the EPC. If the heat pump is installed alongside another heat source, for instance a boiler, a heat meter must be installed to meter the kWhs produced by the heat pump.
The tariffs are calculated from a formula which, apart from the produced heat, also takes into account the flow temperature the heat pump operated at.
The tariff payments are capped for large properties and are limited to 30,000 kWhs per year for ground- and water-source heat pumps and 20,000 kWhs per year for air source heat pump.
For dwellings reaching the cap, ground source installations typically attract around £34,000 over 7 years and air source installation around £11,500 over 7 years.
Which renewable heat technologies are eligible for RHI payments?
The RHI supports the following technologies:
- Ground and water source heat pumps
- Air-to-water heat pumps
Ground and Water Source: 21.17 p/kWh, capped at 30,000kWh/year
Air Source: 10.85 p/kWh, capped at 20,000kWh/year
The government has launched a new domestic Renewable Heat Incentive payment calculator. This calculator will help you to calculate what you may be paid through the scheme, based on the type of renewable heating system to be installed. You can visit the calculator by clicking on the link below.
You can visit the calculator by clicking on the link below.
Renewable Heat Incentive Calculator
How do the RHI payments work?
Full details of the how the payments work can be found on the Ofgem Website:
- Homes on the RHI domestic scheme will receive a quarterly tariff payment for seven years, for every kilowatt hour (kWh) of renewable heat they produce.
- All paid quarterly for seven years.
- Any public grants previously received, including the Renewable Heat Premium Payment (RHPP), will be deducted to avoid people receiving a double subsidy.
- Energy regulator Ofgem is responsible for dealing with applications and payments.
- Tariffs will change annually in line with the Retail Price Index (RPI).
How much these rates represent in real terms will vary between householders and heating technologies. In order to know how much you could potentially earn, you will need to know how much heat your system will generate in a year, in kWh:
- For heat pumps the renewable heat generated will be based on an estimate of the heat demand from an EPC combined with an estimate of the heat pump’s efficiency
To help improve the performance of renewable heating systems, there will be an extra incentive for applicants who install metering and monitoring service packages, of £230 per year for heat pumps.
ENERGY PERFORMANCE CERTIFICATE REQUIREMENT
In order to apply for domestic RHI, you need a recent Enegy Performance Certificate (EPC). In the EPC, you will find an estimate of they yearly energy demand for space heating and domestic hot water. If the heat pump is the only source of heating, this is your deemed heat production and the basis for the calculation of your RHI tariff payments.