In December, Ofgem announced changes to the Renewable Heat Incentive that change how the scheme benefits homeowners in 2017.
The Renewable Heat Incentive, or RHI for short, encourages homeowners to install renewable heating over fossil fuel alternatives by providing a financial incentive for doing so. Customers are paid at a set rate that varies depending on the technology installed, date of installation and the heat demand of the property. Customers will receive payments quarterly for seven years.
Changes to the Renewable Heat Incentive will impact how customers can expect to benefit from the scheme. Below are some of the key differences:
Heat demand capping on Air Source Heat Pumps, Biomass Boilers & Ground Source Heat Pumps
Heat demand capping will limit the total amount of subsidy an installation can receive in order to offer an appropriate level of subsidy.
Air source heat pumps will only be eligible for support up to a property heat demand of 20,000kWh, biomass boilers will be capped at 25,000kWh and ground source heat pumps limited to 30,000kWh.
Although capping won’t impact most homeowners, heating installations in larger, less energy-efficient homes could see their payments decreased.
Air Source Heat Pumps & Biomass Boilers to become more lucrative
Domestic air source heat pumps will see their tariff increased from 7.51p/kWh to 10.02p/kWh. Likewise, domestic biomass RHI payments will increase from 4.21p/kWh to 6.44p/kWh.
Effectively, these increases to the RHI will see most customers installing air source or biomass earn significantly larger payments.
For example, Mr. ‘A’ lives in a typical, modern property. He recently registered his air source heat pump for RHI payments. His deemed Renewable Heat Incentive tariff is now set to earn him £860 in year one. This represents a £234 increase on his original £626 prediction.
Ground source heat pump installations have seen their tariff rate increased from 19.33p/kWh to 19.51p/kWh. Solar thermal installation’s RHI rate will remain at 19.74p/kWh.
Heat Pump installation to require Electricity Metring
Electricity metring will be compulsory on heat pump installations as of April 2017.
The inclusion of electrical metring enables homeowners installing a heat pump to have a better understanding of the electrical consumption directly attributed to running their heating system. Furthermore, monitoring will allow manufacturers to continually improve their technologies by providing a better understanding of their performance in real world scenarios.
Heat metring will still be an optional extra of the Domestic Renewable Heat Incentive scheme. As such, earned RHI payments remain deemed.
Summary of the changes to the Renewable Heat Incentive
2017’s changes to the RHI are likely to have two main impacts:
Homes with lower heat demand installing a renewable heating solution will receive greater RHI payments.
Customers living in less energy efficient properties with a higher heat demand will still benefit from higher tariffs but are likely to see payment only on part of their heat demand. The demand of the property and the technology being installed will determine whether this will benefit the customer or not.