Renewable Heat Incentive for Solar Thermal Hot Water

By Laura Elahi on October 11th, 2015

Homeowners, businesses and communities wishing to benefit from reduced energy bills and environmentally friendly technology will be able to do so through the 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.

Tariffs and payments

The Incentive, of which the domestic phase went live in April 2014, has been designed as a means to increase all UK heating generation from renewable energy sources. It will operates 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.

On 11 July 2013 the Department of Energy and Climate Change (DECC) revealed that solar water heating will benefit from a minimum tariff rate of 19.2p/kWh. This rate now sits at 19.51p/kWh for solar thermal applications submitted before January 2016. The Renewable Heat Incentive also applies to other renewable heat systems such as heat pumps and biomass boilers. Visit Ofgem’s website for a full list of domestic tariff rates.

Key aspects of the Renewable Heat Incentive

1) The scheme supports 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

Please note: The RHI Premium Payment scheme closed at the end of March 2014, when the RHI went live. Renewable heating installations were supported by a ‘RHI Premium Payment’ to help people cover the purchase price of green heating systems. The amount for solar thermal for example was initially £300 per unit, rising to £600 in May 2013.

Those taking up the premium were eligible for the RHI tariff, as was anyone else who has had eligible equipment installed from July 15, 2009. The RHI Premium Payment covered technologies across all of Great Britain. There were 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
Earn over £1,000 per year via the Feed-in Tariff

Save up to £200 per year with a Solar PV (photovoltaic) installationDid you know that a Solar PV system can reduce your energy bills but also make you money by selling any unused energy back to the grid?

This not only helps you financially but also the environment by lowering your CO2 emissions by up to 1000kg p/a.



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About the Solar Feed-In Tariff

The Feed-In Tariff applies to Solar PV (electricity) systems

Calculate SavingsSolar PV Calculator

About the Renewable Heat Incentive

The Renewable Heat Incentive applies to Solar Thermal (hot water) systems


Did you know?

Earn Money via the Feed-In TarrifThe Government's Feed-In Tariff was launched on April 1st 2010 to encourage homeowners to generate their own electricity - it is split into two methods of revenue.

The Generation Tariff earns you a fixed income for every kilowatt hour of electricity you generate. And, The Export Tariff earns you income for every kilowatt hour you generate and sell back to the grid.

An average 3/4 bedroom house fitted with 2.5kw Solar PV panels and normal electricity usage would earn over £850 p/a tax free!

Add this to an approximate £145 reduction in your electricity usage and you could benefit by over £1,000 per year.

Try our Solar PV Feed-In Tariff Calculator to assess your potential payback.

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