Domestic Renewable Heat Incentive 

The tariff for the domestic renewable heat incentive (RHI) for biomass boilers and biomass pellet stoves with back boilers will be 12.2p per kWh. This will be paid to you quarterly and in arrears for a period of seven years. You will have to meet the RHI’s air quality and fuel sustainability criteria. This basically means that you will be paid 12.2p per kWh for every unit of heat energy that your system creates.

Important changes – Spring 2016 Regulatory Amendments

On 3 March 2016 the Department of Energy and Climate Change (DECC) announced their intention to make a number of changes to the Renewable Heat Incentive scheme.

These changes are planned to come into force on 24 March 2016 and key amendments include, but are not limited to, the following:

  • New applicants will not be required to provide a Green Deal Advice Report (GDAR)
  • New applicants with self-build properties will be exempt from the 183 days occupancy declaration
  • Clarification on Ofgem’s powers to request a new Energy Performance Certificate (EPC) and amend the RHI payments accordingly if needed
  • Tariffs will be subject to adjustment by the Consumer Prices Index (CPI) instead of the Retail Prices Index (RPI) (for participants with a tariff start state from 1 April 2016).
  • Ensuring consistency in rounding of tariffs
  • Aligning the RHI sustainability criteria with that set out in the Renewables Obligation Order 2015.

DECC have also published a consultation to seek feedback on the proposed reforms to the scheme. The renewable heat incentive: a reformed and refocused scheme consultation will close on 27 April 2016. 

You should keep these changes in mind if you are planning to apply for the domestic RHI scheme or are considering installing an eligible system. This is not an exhaustive list of changes to the scheme and further information can be found in the Renewable Heat Incentive: amendments to scheme eligibility document on DECC’s site.

Renewable Heat Incentive (RHI) is another Department for Energy and Climate Change (DECC) initiative which allows those who choose to install renewable heat sources in their property to receive payment per kilowatt hour (kWh) of heat produced.

 The RHI has two phases:

  • Phase 1 - RHI payments for heat produced in non-domestic installations (i.e. those in businesses, industry and the public sector). This phase is currently in effect and is open for applications.
  • Phase 2 - payments for heat produced by domestic installations, which the DECC plans to introduce in spring 2014 (though this is unconfirmed).

NB. In the case of businesses, payments received through the RHI counts as taxable income and should be declared as such.

The now confirmed (August 2nd 2013) tariff ranges for the domestic RHI are as follows:*

Biomass-RHI-domestic-rates-chart

In order to be eligible for RHI tariff payments, the property must satisfy the above conditions. Moreover, the installation must be carried out by a Microgeneration Certification Scheme (MCS) accredited installer, who will also install a generation meter.

For more information on non-domestic RHI, see the energy regulator Ofgem’s website.

For information about the domestic RHI, see the DECC website.

*‘Renewable Heat Incentive: Consultation on proposals for a domestic scheme’, Department for Energy and Climate Change, p. 54. Available here.


Non-Domestic Renewable Heat Incentive

Non-domestic Renewable Heat incentive opened for applications in November 2011. It covers commercial and community installations, and pays a generation tariff per kWh produced over a 20 year period. It aims to give a 12% return on capital, and is index linked. The heat produced must be measured by a meter and the payments will be paid in arrears.

Tariffs for new installations from 1 July 2013 are:

non-domestic-RHI-rates-chart

DECC tariff table for non-domestic RHI: https://www.gov.uk/renewableheatincentive/what-youll-get

These biomass tariffs have been tiered to remove any incentive to generate excess heat to receive larger payment sums. These tariffs are designed to a ‘reasonable minimum level of usage’ based on the equivalent of running the installation at full capacity for 15% of the year. Each year you will receive the higher tier-1 tariff for the first 1,314 peak load hours, and the lower tier-2 tariff after that.

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