Guide to the RHI
Soften the financial blow of some tech installations by claiming payments from the government’s cashback scheme
Looking to incorporate renewable tech but concerned about the costs? We explore the government's Renewable Heat Incentive and how this payback scheme can help offset your initial outlay
What is the RHI?
This government scheme aims to make the installation of renewable heating solutions more appealing to homeowners. Introduced in 2014 and run by Ofgem, it offers seven years of fixed rate payments for the domestic use of some form of renewable heating technology. From a financial perspective, the RHI is an attractive prospect, as it helps to soften the initial outlay of buying and fitting the technology during your self build or renovation project.
Which technologies are included?
Four renewable heat solutions fall under the scheme: air and ground source heat pumps (ASHPS; GSHPS), biomass boilers and solar thermal panels. The individual products you choose must feature on the RHI’S approved list to ensure they meet the required quality standards. Your setup must also be installed by an engineer who is registered with the Microgeneration Certification Scheme (MCS) in order to be eligible.
How much money can I claim back?
Rates are set by the Department for Business, Energy & Industrial Strategy (BEIS). The payback tariff you’ll get varies according to the type of tech you’ve fitted and when you applied for the scheme.
Tariffs are altered periodically, but the rates for current applications, as of September 2019, are as follows: 6.88p for every kwh of heat from biomass boilers
10.71p for every kwh of heat from air source heat pumps 20.89p for every kwh of heat from ground source units 21.09 for every kwh of heat from solar thermal
Tariff levels for new applicants are reviewed quarterly and can be cut down if uptake for the scheme is higher than the set budget for that three-month period. However, if the rates are reduced after you have applied for the scheme, you should not be affected.
It’s worthwhile to compare the upfront cost of the supply and installation with the payments you’ll receive back over the years. According to the Energy Saving Trust (www. energysavingtrust.org.uk), a typical solar thermal array, for instance, is somewhere between £4,000 and £5,000, based on a 3.6m2 setup. Of course, the final figure will vary depending on the type of panel you go for and the size of the system. The average arrangement, based on a family of three people, could net payments of roughly £270 per year, which amounts to around £1,890 over the full duration of the scheme. The outlay for your tech should be factored in alongside the savings you’ll make on bills, too.
How are payments calculated?
RHI returns are based on your kwh per year household heating requirement, which is evaluated in your home’s Energy Performance Certificate (EPC).
If you applied for RHI payments on a biomass boiler or a heat pump after 20 September 2017, the calculations will be based on either the heat demand figure or the heat demand limit – whichever is lower. There is no heat demand limit for solar thermal installations. Instead, payments will be worked out according to the deemed annual generation specified on your MCS Certificate.
If you are still weighing up which type of tech represents the best option, use Ofgem’s RHI Calculator to find out what your expected return would be from various appliances (www.gov.uk/renewable-heat-incentive-calculator).
When do returns start?
Providing your application to the RHI is successful, the first payment will be made to you three months after the date you applied. In most cases, the amount you receive will be set at the tariff rate that was applicable on the date of your application.
How long do they last?
Payments are made every three months for seven years, providing you continue to meet the rules of the scheme for the duration of this time. For more information and up to date details on current tariffs, visit www.ofgem.gov.uk/environmentalprogrammes/domestic-rhi.