**The Renewable Heat Incentive has now come to an end and is being replaced by the Boiler Upgrade Scheme.**
To promote and encourage the uptake of domestic renewable heat energy technology, the government introduced the Renewable Heat Incentive to English, Scottish and Welsh households in 2014. New regulations came into effect in May 2018.
The Domestic RHI provides financial incentives to owners of domestic properties who install renewable heating technologies such as ground source heat pumps and solar thermal on their premises.
Those who install these technologies and adhere to the rules of the scheme receive quarterly payments from the government for seven years.
These payment amounts are determined by the amount of renewable heat generated by the household, and the current tariff rates.
To find the current tariff rates, visit the BEIS tariffs and payments page.
Since it was first launched in 2014, there have been several changes to the Ofgem RHI rules. This is because the BEIS reviews its policies from time to time. In March 2016, important changes were announced which have come into effect in two stages:
Changes to the installation standards for heat pumps, effective from 31 July 2017:
If you’ve submitted an application for a heat pump with a first commissioning date after 30 October 2017, you’ll need to be sure it meets the latest criteria under the Microgeneration Certification Scheme (MCS) to ensure your installer complies with the latest industry standards.
Payment frequency, from 1 May 2020:
Payments continue to be made on a quarterly basis but changes to the way payments are made mean the date you receive them may be slightly later than previously.
Homeowners, landlords and self-builders (individuals or groups who built their own homes) residing in England, Scotland and Wales are all eligible to apply for RHI payments.
In order to join the domestic RHI scheme, the renewable heat technology which you install must heat a single domestic property. The building must also have an Energy Performance Certificate (EPC).
Suitable systems that qualify for RHI payments include:
Ground source heat pumps
Air source heat pumps
Biomass (wood-fuelled) boilers
Biomass pellet stoves with integrated boilers
Solar thermal panels to provide hot water
Not all heat sources are supported by the RHI. Here’s a quick rundown of what’s not eligible for the scheme:
Air-to-air heat source pump system
Pellet stoves without back boilers
If you opt for a biomass stove or boiler, the biomass fuel must be sourced from an approved sustainable biomass supplier.
The renewable energy list is not exhaustive and is subject to change, so be sure to check the Ofgem site for the latest rules. The payment amounts will depend on the type of technology, the available tariffs, and metering, so it’s worth weighing these different factors when determining which type of technology to install.
Apply on the Ofgem website here, or phone the Domestic RHI Applicant Support Centre on 0300 003 0744. The phone line is open from Monday to Friday between the hours of 09:00 and 17:00. You can also email DomesticRHI@ofgem.gov.uk.
To get started, gather all the relevant information about your property and the heating technology you’ve chosen to install:
Your name and address
Energy Performance Certificate (EPC) number for your property
The MCS installation certificate number for your heating system
Your banking details
The Seasonal Performance Factor (SPF) if applying for a heat pump
Installing Metering Questions form (if you’re applying for systems requiring metering)
You still may be eligible for RHI assistance if you’ve received a government grant or public funds. However, in this case the application will ask for additional information, including the date you received funds, the amount you were paid and any other figures regarding the cost of installation.
If your application is approved, you’ll receive quarterly payments from Ofgem for the next seven years. The specific amount will depend on the type of technology you’ve installed, and the current tariffs defined by the UK government. The idea is that these tariffs compensate for the cost of installing and operating your renewable heating system.
The heat required to warm your property will be estimated, with payment amounts based on this amount. This is calculated in different ways depending on the type of technology. The following table covers systems that don’t need metering for payment:
|Biomass||Air source heat pump||Ground source heat pump||Solar thermal system|
|Heat demand||Heat demand figure listed on your EPC||Heat demand figure listed on your EPC, adjusted by your heat pump’s efficiency**||Heat demand figure listed on your EPC, adjusted by your heat pump’s efficiency**||Estimated annual generation from your MCS certificate|
|Annual Heat Demand Limit (kWh)**||25,000||20,000||30,000||N/A|
|Current Tariff Rate||6.97 p/kWh||10.85 p/kWh||21.16 p/kWh||21.36 p/kWh|
|Annual payment||Heat demand x Tariff rate = Annual payment***||Heat demand x Tariff rate = Annual payment***||Heat demand x Tariff rate = Annual payment***||Heat demand x Tariff rate = Annual payment***|
*Measured as a Seasonal Performance Factor (SPF) rating
**Applies to applications for systems after 20th September 2017.
***The annual payment is divided by four and paid quarterly.
In most cases, domestic systems payments are based on estimated figures pertaining to your system’s heat output. While this is based solely on the EPC in the case of biomass technologies, in others, meters are used to determine how much heat is produced. One of the most recent changes to the RHI scheme states that any new heat pumps registered must be metered, for this reason.
There’s also an optional monitoring service called the Metering and Monitoring Service Packages (MMSP). These are used to ensure your renewable heating system is in full working order. You can sign up for MMSPs with your systems installer, providing a smart feedback loop of data that alerts the installer if something isn’t working correctly. They’re available for ground source heat pumps, air source heat pumps and biomass pellet boilers. If you decide to sign up for an MMSP, you’ll be paid a bit extra as part of the RHI to cover the cost of this added package. Sign up for this at the same time as your application to receive MMSP payments right from the start.
If you meet the eligibility requirements and are willing to do a little research to see which renewable heat source is best for your property, the RHI could be a great option. Systems like ground source heat pumps are impacted by the soil conditions, while solar panels won’t be as efficient in shaded areas. Clay-based soil retains more heat than sand, for example – so a good systems installer will assess your ground conditions, home layout, and other factors to give personalised advice.
Although it does take some time and effort, the benefits of installing renewable heating are huge. You not only have access to a more efficient source of heating for your home, but you could be eligible for quarterly cash payments from the government to offset your energy bill.
Due to recent government consultation resulting in planned changes in 2017, it's worth reading up on the latest rules around the RHI scheme.
Find out more on Ofgem's dedicated Renewable Heat Incentive section of their site.