Renewable Heat Incentive

By 10th April 2014Articles

RHI – When can this be claimed?

RHI is a Government environmental programme introduced in 2011 (Phase 1), providing financial incentives to non-domestic installations including industrial, commercial, public sector and not-for-profit organisations, in the form of cash back, for increasing the generation of heat through renewable sources.

The Government is expanding the existing scheme (Phase 2) to include additional technologies and domestic installations under 45kW, which is expected in Spring 2014, with final details to be announced Summer 2013.

Under the Scheme Regulations, Ofgem has the function of adjusting the RHI tariffs paid by the percentage increase or decrease in the retail price index (RPI) for the previous calendar year. The increase in the RPI for the calendar year 2012 was 3.1%. Heat generated and used will automatically be applied to any RHI Registered scheme and the new tariffs paid from 1 April 2013.

The owner pays for and installs the new technology and then registers the system with Ofgem. Only industrial, commercial and public sector organisations in the UK are eligible for the scheme, providing they meet certain eligibility criteria. The amount of RHI payment is set at the time of registration and will be adjusted upwards for inflation. Payments are then made quarterly for the next 20 years.

To be eligible, only Microgeneration Certification Scheme (MSC) certificate products can be used and must be installed by an MCS certificated installer.

Renewable Energy Sources

The following technologies are currently included in the RHI scheme:Biomass

  • Biomass heat generation and Combined heat and power (CHP)
  • Ground source heat pumps – must have a ‘coefficient of performance’ (COP) of at least 2.9
  • Solar Thermal heat and hot water systems – must be ‘flat plate’ or ‘evacuated tube’
  • Biomethane

Note: Air Source Heat Pumps are not included in the RHI for the commercial and public sectors. However, premium payments are available to domestic users to help fund the installation of such systems in domestic properties. There is the possibility, therefore, that Air Source Heat Pumps will qualify for RHI for domestic users.

Registering RHI

Having decided on the preferred renewable heating system the owner must apply for accreditation to the RHI Scheme, submitting an application to Ofgem, with a quotation from a certified installer (MCS), for their consideration. The MCS installer must provide, on completion of the installation, a completion certificate for the installation in order for the scheme to be registered with Ofgem. Once complete, Ofgem will begin paying the incentive.

Payments

The paying of tariffs is based on metering only of the actual heat produced. Heat meters must be installed at point of generation and, where appropriate, at the point of usage. Meters must meet certain standards of accuracy and reliability and provide confidence that payments are based on accurate measurements.

The RHI provides financial support for renewable heat technologies for the lifetime of the installation for a maximum 20 years. Payments are made on a quarterly basis. Once you are accredited under the RHI, a tariff level will be assigned to your installation based on its technology (e.g. biomass, heat pump, solar) and size and payments will be made based on the actual heat output of the system.

Payments begin to accrue from the date of accreditation of the installation. The date is confirmed in the accreditation confirmation letter emailed to successful applicants.

Payments are Calculated

You are paid a certain amount per kilowatt hour (kWhth).

For a simple system: This is calculated by multiplying the appropriate tariff by the amount of eligible heat generated in the relevant quarterly period i.e. Payment = Tariff level x Heat generated by RHI installation.

For a more complex system: Once the meter readings have been provided, the heat data figures required by the IT system on the RHI Register will calculate and display the ‘Eligible Heat Output’ (EHO) figure in kWhth. This is the amount that will be multiplied by your tariff to determine the payment amount.

Tariff Adjustments For The RHI

Ofgem are the regulatory body in charge of the RHI payments, adjusting the RHI tariffs paid by the percentage increase or decrease in the retail price index (RPI) for the previous calendar year. The increase in the RPI for the calendar year 2012 was 3.1% with tariff levels increasing accordingly from 1st April 2013.

Heat generated by registered eligible renewable technologies will be paid the new tariff rates up until 31 March 2014.

The following table shows current tariff levels for each of the supported technologies:

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