On Wednesday, December 14, the Government announced RHI changes that were results of nearly a year’s consultation into the Renewable Heat Incentive.
A consultation on the Renewable Heat Incentive began in 2016. The aim of this consultation process was to provide a better end result to customers installing renewable heating and to ensure the scheme’s success in meeting the UK’s carbon emission targets.
RHI Changes in 2017
Renewable heating tariff increases
Domestic RHI tariffs for air source, ground source and biomass boilers are to increase.
Air source heat pump systems will see the biggest leap. The air source tariff will increase from 7.51p/pkWh to 10.02p/kWh – a 25% rise.
The RHI tariff for domestic biomass installations is set to increase from 4.21p/kWh rate to 6.44p/kWh. This reflects the level available before biomass’ digression in late 2015.
Homeowners installing a ground source heat pump technologies will see their eligible tariff rate increase slightly from 19.33p/kWh to 19.51p/kWh.
Solar thermal systems’ RHI tariff will remain at 19.74p/kWh. This is despite initial comments that thermal systems would lose all support.
Heat demand limits
Heat demand limitation is another key outcome of the consultation.
Capping will be introduced to offer ‘appropriate subsidy that represents value for money’. As such, the amount of financial support an installation is eligible for may change. Heat limits will cap the maximum eligible heat demand for the various technologies.
Air source heat pump installations will see their RHI payment capped at a heat demand of 20,000kWh. In effect, customers with a new air source installation will receive 10.02p/pKw up to a total demand of 20,000 units per year.
Domestic biomass installations will now be eligible for their new tariff rate up to a total property heat demand of 25,000kWh per annum. To summarise, biomass boilers installed after these RHI changes come into place will earn 6.44p/kWh up to a total of 25,000 units.
Ground source heat pump installation’s RHI payment will be capped at a demand of 30,000kWh. As a result, new ground source installations will earn 19.55p/kWh up to a total property demand of 30,000 units per year.
Solar thermal installations will not be subject to capping.
Homes with a heat demand that exceeds these figures will still be eligible to receive an incentive through the RHI scheme but will only earn payments on demand up to these limits. For example, an air source installation in a home with a 25,000kWh annual demand won’t be entitled to a subsidy on 5,000kWh of the total demand.
Air source and ground source heat pumps to have compulsory electricity metring
April’s scheme amendments will see all new air and ground source installations require the fitting of an electricity metre to track the electrical input of the system.
Electricity metring should help ensure better ability to monitor and evaluate the performance of respective air or ground source system. Electricity metring should also help the continued improvement of heat pump technology.
Despite this, Domestic RHI payments will still remain deemed in the absence of heat metring. Consultation results state added cost and impact of installing heat metring would not offer the consumer value for money.
Future changes to the Renewable Heat Incentive
The government also announced the assignment of third party rights. However, this is expected to begin later in 2017.
Third-party ownership will help to cover the upfront costs of a renewable heating solution. This is expected to make renewable heating more widely accessible. Customers will still own their system.
What do changes to the RHI mean to the customer?
Check back here soon for further information on what impact these intended alterations to government support are likely to have for homeowners.