Renewable Heat Incentive
Solar Thermal
Air Source Heat Pumps
Ground Source Heat Pumps
The following are the key proposals from the Consultation Document:
In February 2010, the Government published a Consultation Document
setting out its proposals for the design and operation of the Renewable Heat Incentive (RHI), with the aim of providing financial support to encourage individuals, communities and businesses to switch from using fossil fuel to renewable sources for heating.
Following consultation, the RHI scheme will be launched in April 2011.
Key proposals of the RHI are as follows:
The scheme will support a range of technologies and both installers and products must be certified under the Microgeneration Certification Scheme (MCS) or equivalent standard; this will ensure the quality of installation and aid consumer protection.
RHI payments will be claimed by, and paid to, the owner of the equipment. Payments will be guaranteed and made over the life of the equipment and will be linked to inflation.
All payments will require evidence to support continued operation.
All installations commissioned after 15th July 2009 will be seen as a ‘new installation’ and will be eligible for the RHI.
Tariff levels are proposed to provide a rate of return of 12% on the additional capital cost of renewables, with a lower rate of return of 6% given to solar thermal.
Renewable Heat Incentive
Proposed tariffs Ground Source Heat Pumps
Up to 45kW: 7p/kWh for 23 years
45 to 350kW: 5.5p/kWh for 20 years
350kW and above: 1.5p/kWh for 20 years
Proposed tariffs Air Source Heat Pumps
Up to 45kW: 7.5p/kWh for 18 years
45 to 350kW: 2p/kWh for 20 years
Proposed tariffs Solar Thermal
Up to 20kW: 18p/kWh for 20 years
20 to 100kW: 17p/kWh for 20 years
Payments will be calculated on the ‘deemed’ annual amount of heat output, in kilowatt hours (kWh). The proposal is for the amount of heat generated at the small to medium scale to be estimated, or ‘deemed’, at installation stage (in most cases). This will allow the homeowner to receive a set amount based on the deemed output, and should encourage low energy
consumption whilst discouraging waste.
The RHI will encourage renewable energy systems to be installed in buildings adopting a basic level of energy efficiency measures in a ‘whole-house approach’; consisting of:
• at least 125mm of loft insulation;
• cavity wall filled where appropriate.
Buildings will be assessed for their ‘deemed’ heat demand though
the Standard Assessment Procedure (SAP), or similar, which is already
in use for energy rating of buildings, based on the assumption that
these minimum energy efficiency measures are in place.
The renewable heat installation will be the only fixed heating installation in the property. Multiple qualifying technologies such as solar thermal and heat pumps will be included in the scheme. It is expected that current grant schemes such as the Low Carbon Buildings Programme, CERT and CSEP will still be available and can be claimed in addition to the RHI up to April 2011.
Expected returns (estimates only)
Example 1
4-bed, detached house
Floor area: 250m2
Project type: New build
Annual heating load: 38,376kWh/year
Domestic hot water load: 5,252kWh/year
Total heat load: 43,628kWh/year
Qualifying technologies: Ground source heat pump (GSHP), solar thermal
Space efficiency
DHW efficiency
Tariff from RHI pence/kWh)
Annual contribution from RHI paid tohomeowner
Electricity used by technology (kWh/year)
Annual running cost
Annual income from RHI
Life of unit(years)
Lifetime income from RHI paid to homeowner
GSHP 320% 224% 7p £3,054 14,337 £1,720 £1,334 23y £30,671
Solar 100% 100% 18p £567 150 £18 £549 20y £10,980
Example 2
3-bed, semi-detached house
Floor area: 100m2
Project type: New build
Annual heating load: 17,628kWh/year
Domestic hot water load: 3,890kWh/year
Total heat load: 21,518kWh/year
Qualifying technologies: Air source heat pump (ASHP), solar thermal
Space efficiency
DHW efficiency
Tariff from RHI pence/kWh)
Annual contribution from RHI paid tohomeowner
Electricity used by technology (kWh/year)
Annual running cost
Annual income from RHI
Life of unit(years)
Lifetime income from RHI paid to homeowner
ASHP 250% 175% 7.5p £1,614 9,274 £1,113 £501 18y £9,017
Solar 100% 100% 18p £420 150 £18 £402 20y £8,040
Example 3
2-bed, mid-terrace house
Floor area: 60m2
Project type: Cavity wall
Annual heating load: 9,242kWh/year
Domestic hot water load: 2,985kWh/year
Total heat load: 12,227kWh/year
Qualifying technologies: Air source heat pump (ASHP), solar thermal
Space efficiency
DHW efficiency
Tariff from RHI pence/kWh)
Annual contribution from RHI paid tohomeowner
Electricity used by technology (kWh/year)
Annual running cost
Annual income from RHI
Life of unit(years)
Lifetime income from RHI paid to homeowner
ASHP 250% 175% 7.5p £917 5,403 £648 £269 18y £4,837
Solar 100% 100% 18p £322 150 £18 £304 20y £6,080
Note: The above figures have been produced within Standard Assessment
Procedure (SAP) guidelines and with an assumption that 60% of the hot
water requirement is met through solar thermal. Annual running cost is based on 12p/kWh.
Application process for Homeowners
- Decision taken to install renewable heating/domestic hot water system
- Contact certified supplier/installer
- Installer fits system and sends certificate to Ofgem
- Ofgem accredits new generator
- Ofgem makes payment to the homeowner
The next step
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