2017 RHI Tariff has been set – Renewable Heat Incentive update

On 30 November 2016, BEIS announced the 2017 RHI tariff for domestic installations of renewable heating solutions such as air source heat pumps and biomass boilers.

The Domestic Renewable Heat Incentive provides a financial incentive to homes installing a renewable heating solution. The RHI scheme was designed to reduce UK carbon emissions. As a result, it encourages the uptake of environmentally friendly heating systems, as opposed to harmful fossil fuel boilers.

Depending on uptake, RHI tariffs for air source heat pumps, ground source heat pumps, biomass boilers and solar thermal are subject to quarterly digression. In effect, technologies that exceed anticipated uptake will see their tariff cut.

2017 RHI Tariff

Tariffs for applications submitted systems after 01 January 2017.

What does this mean for Heat Pumps?

Amongst speculation that 2017 would see heat pump RHI payments increased, the tariffs for air source heat pumps and ground source heat pumps haven’t changed.

Arguably, air and ground source heat pumps are the most popular renewable heating solutions, offering ideal replacements for oil and LPG boilers by providing all of a home’s space heating and hot water demand. Customers considering a heat pump  now have a further 3 months to complete their installation or application without risk of change to their payment.

What does this mean for Solar Thermal?

Solar thermal system’s tariff remains at 19.74p. DECC had previously discussed the complete removal of support for solar thermal installations. Potential changes to solar thermal’s elgibility in the near future, now could be the right time to install solar thermal.

What does this mean for Biomass Boiler?

Biomass is the only domestic tariff to see a reduction. A 10% reduction will commence in January 2017 as a result of a digression trigger being passed. The tariff will decline from 4.68p to 4.21p. As a result, applications for biomass installation in Q4 2016 must be submitted prior to the turn of the year. Alternatively, any homeowners considering installing a biomass boiler should consider the impact of these changes before proceeding with an installation.

Looking Forward with the Renewable Heat Incentive

All eyes now turn to BEIS’ next RHI announcement, expected no later than 31 March 2017.

2016 saw the introduction of several changes to the RHI. More changes to the RHI are expected in 2017. These changes included things such as the removal of support for solar thermal systems and reallocation to heat pumps, the introduction of third party ownership and heat demand capping. Find further details on these changes here.

Announcement of changes to the RHI are expected prior to April’s digression.