Our ‘Idiot’s Guide’ to the Renewable Heat Incentive

How the Renewable Heat Incentive works and how you can save money

 

Eligible renewable heat sources and their Phase 1 tariff levels Solar heating: 8.5p/kWhr Biomass: 1.9 to 7.6p/kWhr (with tiered tariffs) Geothermal and ground source heat: 3.0 to 4.3p/kWh  Biogas heat and gas injection: 6.0p/kWhr Eligible in future? Air source heat pumps

What is the Renewable Heat Incentive?

It is a payment for generating heat from renewable sources. Like the Feed-In Tariffs, it is set by Government.

The RHI is administered by the official regulator Ofgem who pay the tariffs with money from the Treasury.

How much is the Renewable Heat Incentive worth to participants?

First of all you will save money by eliminating or reducing your need for gas or oil, both of which are becoming increasingly expensive year-on-year.

Secondly, you will be paid up to 8.5p/kWhr for the hot water and heat you generate and use yourself. It depends on exactly what systems you use and how large they are as to what the exact tariff level is.

You can find information on all the various renewable energy systems you can use at our page on eligible energy sources.

How long do the tariffs last?

They are paid for 20 years from the registration date and index-linked for inflation.

Is that long enough to cover the installation costs?

In most cases the simple answer is yes. We estimate that many participants will earn enough money from the tariffs to pay off their installation costs in about seven to nine years. According to the Government, which has set the tariff levels, the average for most systems be a return of around 12% per annum.

When do they start?

Tariffs started in November 2011 for non-residential systems and may begin in summer 2013 (to be confirmed) for households.

However, any suitable system installed from now onwards will be eligible for the tariffs when they begin.

Are there any restrictions?

The tariffs apply to the technologies listed on this site. There are various technical and accreditation requirements detailed further here.

How can I benefit?

Good question! Read more with a general overview on benefitting from the RHI. For details of how to register for the RHI go here, or if you need help registering your system go here.

Want more information?

This website contains pretty much everything anyone should need to know. When you’re ready move on to the ‘Boffin’s Guide’.

See also our extensive Frequently Asked Questions section.