The Renewable Heat Incentive (RHI) *Updated For 2021*
The domestic Renewable Heat Incentive (RHI) is a government financial scheme to promote the use of renewable heat. The Department for Business, Energy and Industry Strategy (BEIS) develops the scheme policy and rules which can change year on year for both new and existing participants. The scheme is then implemented and administered by Ofgem.
We also saw an increase in tariffs since April, with the new tariffs being as follows:
- Biomass Boilers & Stoves has increased from 6.54p to 6.74p p/kWh.
- Air Source Heat Pumps has increased from 10.18p to 10.49p p/kWh.
- Ground Source Heat Pumps has increased from 19.86 to 20.46 p/kWh.
- Solar Thermal has increased from 20.06p to 20.66p p/kWh.
The rate of domestic RHI payments up until now has changed year on year, using a degression system to control the budget of the scheme. However, at the end of May 2019, the BEIS announced that there would be no degression from 1st July 2019 onwards.
Currently, the Government has not addressed has it plans to encourage the installation of low carbon heating systems, but we will update you when more comes out.
The latest updates
As mentioned, this RHI scheme policy is subject to relatively frequently. As of April 2021, the BEIS made changes to the Domestic RHI regulations. Participants whose heating system was commissioned on or after 1st March 2019 will now be able to apply for the Domestic RHI, until the scheme closes to new applicants on 31st March 2022.
The scheme was previously restricted with accreditation applications required within 12 months of commissioning an eligible heating system. Applicants who commissioned their eligible heating system on or after 1 March 2019 who were previously rejected for not meeting this 12-month rule are now also able to re-apply for accreditation.
If you’ve been thinking about investing in heat energy, now is the perfect time to do it as the March 2022 deadline is fast approaching. To learn more about the Renewable Heat Incentive, continue reading.
The Story So Far
The Renewable Heat Incentive (RHI) has been supporting the installation of renewable heating systems since it was first introduced in April 2014.
Set up in a bid to minimise the effects of climate change, the scheme is designed to support the uptake of renewable energy and can be neatly summed up the Minister of State for Energy and Intellectual Property:
“The Renewable Heat Incentive (RHI) was introduced to help kick-start the transition to low carbon heating in the UK, giving help to all in moving from conventional forms of heating to low-carbon alternatives.
The scheme provides financial incentives to households and non-domestic consumers, including public bodies and charities, to help bridge the gap between the cost of renewable heating systems and those conventional alternatives.”
The scheme has seen the deployment of thousands of installations across a range of renewable and low energy heating products for both domestic and commercial uses. However, it has not been without it’s up and downs – attributed to deployment caps, tariff cuts and installation deadlines.
But in general, the scheme has been an overall success and has been well received.
How Does It Work?
So what exactly is the RHI all about? How does it work? Can you really get paid to produce your own heat energy?
Put simply, in order to receive support through the Domestic Renewable Heat Incentive scheme, you need to install an eligible technology as a means to heating your home. You can then also apply for financial support to help cover the cost of the systems and installation.
Eligible technologies include Biomass Boilers, Air Source and Ground Source Heat Pumps and Solar Thermal systems.
Each system has to be fitted by a qualified installer (like ourselves), who are certified by the Microgeneration Certification Scheme (MCS). This helps to protect consumers by ensuring the systems installed meet certain standards and are fitted correctly.
Each technology is supported through a tariff that is set at a certain level, with the tariffs shown as pence per kilowatt-hour (p/kWh). RHI payments that a household receives will depend on the applicable technology tariff and the annual heating requirements for the property.
For most participants, the property’s heating requirement is taken from the Energy Performance Certificate (EPC), referred to as “deeming” the heat requirement of a property.
In some cases, heat meters are required to determine the exact amount of heat being supplied by the system.
Once approved, participants in the scheme will receive payments for 7 years as long as they comply with the rules of eligibility. There is also an Annual Declaration form that needs to be completed each year to ensure that you are compliant with the scheme’s rules.
Some of these rules include declaring that you still own a heating system and that it is in good working condition and the meter installed is also in good condition.
How Do I Apply?
In order to be eligible for RHI payments, you need to be living in England, Wales or Scotland and either own a property, be a private or social landlord or build a new property. You have up to 12 months after a renewable heating system has been installed to apply for the scheme.
As far as documentation is concerned, you will need an MCS installation certificate number, which you would receive from your certified installer after the completion of the system installation. There is also a Green Deal Assessment for your building that will need to be carried out in order to become eligible.
This Green Deal Assessment is made up of the Energy Performance Certificate (EPC) and an Occupancy Assessment. The EPC will show the energy efficiency of the property, and the Occupancy Assessment will point out areas that could improve the energy efficiency of the place.
Once this is all done, participants will have to submit how much was paid for the installation and bank details in order to start receiving payments.
Visit the Ofgem website to learn more about applications for the RHI.
Overall, the Renewable Heat Incentive is a fantastic way of getting more people to install renewable heating systems in their homes, offering attractive financial support over a period of time.
If you have a potential project that you would like us to get involved with or would like to learn more about how you could be benefiting from the Renewable Heat Incentive, please contact one of our experts today.