Renewable Heat Incentive – RHI subsidy for Renewable Heating Systems

The Renewable Heat Incentive provides a financial subsidy to homeowners and businesses that install an eligible renewable heating solution.

What is the Renewable Heat Incentive?

The UK government initiated the Renewable Heat Incentive scheme as a part of their wider goal to lower UK carbon emissions. Space heating provision is one of the leading contributors to the UK’s total carbon output. As such, in 2011, low carbon heating systems became eligible for RHI support.

In effect, the scheme subsidises the installation of renewable heating technologies by paying customers for the heat their system produces. Renewable Heat Incentive payments aim to bridge the gap between the cost of fossil fuel systems and renewable solutions. Thus, making them more widely affordable.

What Renewable Technology is eligible for RHI?

There are four main renewable heating solutions that are eligible for Renewable Heating Incentive payments:

Air Source Heat Pumps

Ground Source Heat Pumps

Solar Thermal Collectors

– Biomass Boilers

The RHI scheme is only open to MCS approved heating technologies. However, each installation needs to meet a number of criteria You can see them here.

How does the RHI scheme work?

Renewable heating systems can be registered for RHI payments once they’ve been commissioned.

The Renewable Heat Incentive pays homes and businesses quarterly for the energy their system produces. Domestic installations receive payments over a seven-year period whereas commercial installations are eligible for 20-years of payments.

The degree of subsidy earned depends on a number of factors.

Firstly, the system installed. Air source heat pumps, ground source heat pumps, solar thermal and biomass boilers can all be eligible for RHI payment. Each system has a seperate tariff rate (shown in the table below).

Secondly, payments received are influenced by the demand of the property where the system is installed. Homes with high heat demands will earn more in subsidy. Everything from room sizes through to floor insulation and wall type impacts a building’s heat demand. An installing company must consider this when designing a system.

Finally, the efficiency of the heating system itself impacts the amount of subsidy an installation can earn. For example, one ground source heat pump might have a higher efficiency rating (SPF or SCOP) than another. Therefore, this heat pump will earn the installing customer more in RHI payments.

The importance of an Energy Performance Certificate in the RHI process

All Renewable Heat Incentive applications require an Energy Performance Certificate dated within the last two years. The EPC has several important roles when it comes to the RHI:

Heat Demand Figures

Realistically, the most important pieces of information on an EPC are the heat demand figures.

Found beneath the property’s summary, the heat demand figures are an estimate of the space heating and hot water demand of a building. Payments from the Renewable Heat Incentive are deemed using these EPC figures, hence their importance.

For example, an air source heat pump providing complete heating and hot water demand will earn RHI payments on the total of these demand figures.

Recommended Measures

An EPC provides customers with a list of recommended energy efficiency improvements.

As part of the RHI’s eligibility criteria, a building must meet set loft and wall insulation criteria. Before an RHI application will be accepted, any EPC recommendations on loft and wall insulation must be met.

GreenGenUK will advise on any EPC recommendations and how to overcome them as part of the survey and quotation process.

Current Domestic RHI Tariffs

Renewable Solution RHI Tariff Rate RHI Tariff Eligibility
Air Source Heating 10.49p 7 years
Ground Source Heating 20.46p 7 years
Solar Thermal 20.66p 7 years

Visit Ofgem’s Domestic RHI webpage to see any future or historical tariff changes.

Current Commercial RHI Tariffs

Renewable Solution RHI Tariff Rate RHI Tariff Eligibility
Air Source Heating 2.69p 20 years
Ground Source Heating 9.36p 20 years
Solar Thermal 10.75p 20 years

Heat Demand Capping

In 2017, the Renewable Heat Incentive saw the introduction of heat demand capping. The idea behind capping is to provide a fairer distribution of RHI subsidy. In effect, heat demand capping limits the amount of financial support a single renewable heating installation can earn.

The cap for air source heat pump installations is 20,000kWh

Capping for ground source heat pump installations is 30,000kWh

The cap for biomass boiler installations is 25,000kWh

Our post has further information on the impact of heat demand capping.

How to apply to the Renewable Heat Incentive?

Customers can register their renewable heating system for Renewable Heat Incentive payments once their installation has been commissioned. Most applications consist of an online submission. Further information can sometimes be requested.

In order to complete the application, customers need to input info on their installation. The information required is as follows:

– An MCS Certificate
– AN EPC dated on the last two years
– Information on the efficiency and output of the system
– Personal information

Our blog post has a more detailed breakdown on how to apply to the Renewable Heat Incentive.