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Renewable heat incentive


Payments for renewable energy heating systems

The UK Government introduced the world's first Renewable Heat Incentive to encourage the uptake of renewable heating technologies and help meet our target of 12% of heating coming from renewables by 2020

Non-Domestic Properties


The Renewable Heat Incentive started for non-domestic properties in 2011.   It provides an annual cash back payment for 20 years for renewable heating systems such as biomass, heat pumps and solar systems installed after 15 July 2009 (or after 4 December 2013 for non-domestic air source heat pumps and biomass CHP). This RHI applies to business premises, public sector and community organisations together with district heating systems for multiple dwellings.
RHI payments vary depending upon the technology type.  The tariffs are reviewed quarterly.  The current tariffs for installations installed and registered from 20 September 2017 are:
  • Biomass boiler: 2.96p per kWh for the first 35% of heat load (tier 1); 2.08p per kWh for additional hours (tier 2)
  • Biomass CHP: 4.29p per kWh for CHPQA certified biomass CHP
  • Ground Source Heat Pump: 9.09p per kWh for the first 1314 run hours per annum; 2.71p per kWh for additional hours
  • Air Source Heat Pump: 2.61p per kWh
  • Solar Thermal: 10.44p per kWh
The logic of the 1314 run hours is that this is regarded as the "initial heat" generated for an eligible purpose and is the amount of heat, in kWh, that would be generated by the installation if running at full capacity for 15% of the year. 
The tariff is index linked over it's 20 year lifetime.  There has been degression in the small biomass tariff regularly since 2014 although this has reduced more recently.
There are some additional requirements for heat pumps:
  • A design seasonal performance factor (SPF) of 2.5 is needed as the minimum for an installed heat pump to be able to claim the non-domestic RHI whilst retaining the requirement of a minimum COP of 2.9. Evidence of this will be a necessary part of an RHI application.
  • Mandatory electricity consumption measurement and reporting of this is required for all heat pumps. Thus an electricity meter will be necessary to measure the electrical consumption of the heat pump.
  • Heat pumps that are capable of simultaneous heating and cooling will require meters to measure heat drawn from the ground loop in addition to heat output from the heat pump system.

Biomass fuels must comply with sustainability requirements.  These RHI sustainability requirements were introduced in 2015 and consist of a greenhouse gas (GHG) emissions limit and specific land criteria for the fuel used in the biomass boiler. 

In order to receive the non domestic RHI, a certified heat meter must be installed. Quarterly readings must be submitted to OFGEM who administer the scheme.  To apply for the non domestic RHI visit the OFGEM website.

Domestic Properties

For domestic properties, the RHI commenced in April 2014 and the level of tariff is higher than the commercial scheme but paid over a shorter 7 year period.  The amount of heat produced from the biomass boiler, heat pump or solar thermal scheme is normally deemed meaning that a heat meter is not required.
The tariffs are index linked annually.
From 1 April 2018 to 30 June 2018 the domestic RHI tariffs are as follows:
  • Air source (air to water) heat pumps 10.49p/kWh (with a heat demand limit of 20,000kWh per annum)
  • Biomass boilers 6.74p/kWh (with a heat demand limit of 25,000kWh per annum)
  • Ground source heat pumps 20.46p/kWh (with a heat demand limit of 30,000kWh per annum)
  • Solar thermal 20.66p/kWh
Households need to meet certain minimum energy efficiency targets such as loft and cavity wall insulation.  Publicly funded grants received towards the installation, including RHPP are deducted from RHI payments. For biomass and heat pumps, the RHI is based on an estimated figure of heat (and hot water) demand from a domestic Energy Performance Certificate (EPC) up to the heat demand limits above. For heat pumps, this will be combined with an estimate of the heat pump's efficiency to determine the renewable proportion of the heat.  An electricity meter will be required with all heat pump installations to measure the electricity consumption of the heat pump.  For solar thermal systems, the payments will be based on the estimate of the system's performance completed as part of Geowarmth's installation of the solar system.
The domestic RHI applies to retrofit installations in single domestic dwellings and self build new homes.  It is limited to heating systems of less than a total of 70kW thermal ouput, although only MCS registered products up to 45kW output will qualify.  For larger domestic properties this means say a 60kW biomass boiler or heat pump will not qualify for the domestic RHI but two 30kW MCS certified products would qualify.
Second homes can also qualify under the domestic RHI but heat produced in second homes is metered rather than deemed.  Metering is also required in domestic dwellings if there is a fossil fuel boiler also installed.
A higher RHI payment can be obtained if Geowarmth install an optional metering and monitoring package. 
For a bespoke calculation of RHI benefits or for more information please contact us.
The domestic RHI applies to installations since 15 July 2009 not just to installations completed since the launch of the scheme.  RHI applications must be made within 12 months of the commissioning date for new installations.
From 26 March 2016 all heat pumps must be ErP compliant and achieve a minimum seasonal performance factor (SPF) of 2.5 in order to qualify for the RHI.  The Energy Labelling Directive introduces a product label and a package label similar to that found on other domestic applicances.  All Geowarmth installations use high efficiency heat pumps which are ErP compliant and Geowarmth undertake the calculations to demonstrate the appropriate SPF has been achieved.
For more detailed information on the Renewable Heat Incentive, please visit the BEIS website or the Energy Saving Trust website.  The application process is on OFGEM's website
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