Renewable Heat Incentive

The Renewable Heat Incentive (RHI) is the world’s first long-term financial support programme for renewable heat.

It was launched in November 2011 with a scheme for the non-domestic sector that provides payments to industry, businesses and public sector organisations. A domestic scheme was launched in April 2014.

What is it?

Click to watch MWF regional manager, Ben Goh explain in this short video.

The Renewable Heat Incentive is a regular (usually quarterly) payment made to you by the government to reward the use of heat produced by renewable energy and applies to all types of biomass boilers as long as they meet the qualifying criteria.

It is guaranteed for 20 years (7 years for domestic) from the date of installation of your boiler and the amount varies dependent upon the size of boiler and the amount of heat produced.

For a small boiler of up to 199Kw, the first 15% of the full load capacity of the boiler attracts an RHI payment of 3.26p/kWh for non-domestic and 4.68p/Kwh for domestic. This decreases in steps as the boiler size increases but is inflation linked to CPI (Consumer Price Inflation) so adjusts each year. These rates are applicable for the period 01.07.16 – 30.09.16.

How does it help?

Although every installation is different, typical pay-back for a biomass boiler qualifying for RHI is around four to six years and is particularly good if the boiler is replacing more expensive alternatives such as oil, LPG or electric heating.

As fuel prices are currently around 3.0p/kWh to 5.0p/kWh (site specific) then once the installation costs have been covered by the fuel savings and RHI payments, the system should attract RHI payments which are higher than the cost of the fuel for the remainder of the 20 year period.

How does it work?

The Renewable Heat Incentive is managed by the Department of Energy and Climate Change (DECC) and administered by Ofgem.

Full information about the Renewable Heat Incentive can be found at:

DECC:

www.gov.uk

Ofgem:

www.ofgem.gov.uk

The scheme operates by making a payment in p/kWh based on the heat meter readings which are submitted to Ofgem on a quarterly basis.