FAQs
Is the tariff intended to cover the total cost of the system?
No - it is only designed in principle to cover the differential cost of renewable (compared to traditional) heating systems
Chapter 6 of the government's RHI announcement says
Compensation for cost difference
The tariffs are calculated to compensate for the additional cost of renewable heat. This means that they do not compensate for the full cost either of the renewable heat equipment or any fuel used by the renewable heat equipment, but only for the additional cost of such equipment and fuel above that of the fossil fuel alternative. We refer to the fossil fuel alternative as the ‘counterfactual’ fuel. We have assumed that the counterfactual fuel would be gas and have calculated the tariffs accordingly.
