Renewable Heat Incentive for Solar Thermal Hot Water

Homeowners, businesses and communities wishing to benefit from reduced energy bills and environmentally friendly technology will be able to do so through the upcoming Renewable Heat Incentive (RHI).

The Renewable Heat Incentive is a Government initiative developed by the Renewable Energy Association (REA) where households in England, Scotland and Wales can receive tariff payments by installing renewable heat systems in their properties. As the eligibility of the scheme is dependent on the installation of a renewable heat system it is, in theory, open to everyone, including households, landlords, businesses, farmers, schools and hospitals.

The Incentive, of which the domestic phase is due to be launched in Spring 2014, has been designed as a means to increase all UK heating generation from renewable energy sources from one per cent to 12 per cent by 2020.

It will operate in a similar way to the Feed-In Tariff (FIT) as both schemes offer a payment for every kilowatt hour (KW/h) of renewable energy a system produces.

However, while the FIT applies solely to green electricity production (like solar panels), the Renewable Heat Incentive applies to renewable heat systems such as solar thermal panels, heat pumps or a biomass boiler.

Key aspects of the RHI:

1) The scheme aims to support a range of technologies, including solar thermal, ground-source heat pumps and biomass.

2) It will support heating at all scales, including households, businesses, offices, public sector buildings and industrial processes in large factories.

3) The payment you receive will be based on the amount of heat your system produces. According to the Department of Energy and Climate Change, the tariff levels are designed to bridge the financial gap between the cost of conventional and renewable heat systems at all scales.

RHI Premium Payment

As of July 2011, up to 25,000 installations will be supported by a new ‘RHI Premium Payment’ to help people cover the purchase price of green heating systems. The amount for solar thermal for example is £300/unit.

Those taking up the premium will be eligible for a RHI tariff when the scheme launches, as will anyone else who has had eligible equipment installed from July 15, 2009.

The RHI Premium Payment will cover technologies across all of Great Britain.

There will be clear eligibility criteria in order to qualify for a Premium Payment, including:

• A well insulated home based on its energy performance certificate
• Agreeing to give feedback on how the equipment performs

The Government is expected to publish details of the RHI Premium Payment and how this will apply in May.

Please note – As the full details of the scheme are yet to be published the above information is subject to change.