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Renewable Heat Incentive
The information below is based on the original consultation document published in February. On October 20th, within the Spending Review, the Government announced that the Renewable Heat Incentive has the green light and will begin in April 2011. However, it will be reduced in scope by 20% as it will now be paid for by the Treasury, instead of through a levy on energy bills, as originally planned. This will have an impact on the current information, and we await the Government's response to the consultation before we can confirm how the scheme will have changed. The Governments response is anticipated by the end of the year. (Dept of Energy & Climate Change)
The Renewable Heat Incentive (RHI) pays the property owner for the renewable heat generated within the property, where certain eligible technologies have been installed by a certified installer.
The RHI is a fixed annual payment for the renewable heat you generate yourself. The incentive payment and the money you save on your energy bills, will off-set the cost of installing the renewable system.
The tariff payments will be calculated by multiplying the proposed tariff per kWh by the amount of heat output of the system. This may be measured or deemed (which means a calculated estimate of the heat output).
Although very similar to the Feed-In Tariffs, there are two differences due to the fact that pretty much every single property in the UK generates its own heat from a gas or oil boiler. Firstly, there is no ‘National Grid for Heat’ and so importing and exporting heat is not relevant. Secondly, it will be paid for by the Treasury not by energy users.
To qualify:
*install a renewable heat systems in your property such as solar thermal panels, heat pumps or a biomass (wood burning) boiler
*estimate of how much heat your renewable energy systems will produce
*register in April 2011 and get paid a fixed amount annually, based on the estimated heat output
Benefits
*Cut the cost of your current energy bill
By installing renewable heat equipment, you will get paid for the heat you generate. Apart from the cost of electricity to power a heat pump or wood chip/pellets for a biomass boiler, the RHI is structured so that these costs are reduced or approximately the same as the payments you receive. The average home is expected to make a net profit of £600!
*You won't be affected by fuel price changes as badly
We have all seen our utility bills rising and the prediction is, that they will continue to do so. Renewable energy means you will only rely on a small amount of this purchased energy from utility companies, as all the systems rely on electricity or some other fuel (e.g. wood) to run.
*Help the environment
We generate 99% of all the heat we need from oil, gas fuel or electricity power stations. Only 1% comes from renewable sources. The aim of the Renewable Heat Incentive, is to get 12% of the UK's heat generated from renewable sources by 2020.
Eligibale Heat Technologies & Tariffs
* Solar thermal heat and hot water
* Air source heat pumps
* Ground source heat pumps
* Anaerobic digestion to produce biogas for heat production
* Biomass heat generation and CHP (Combined Heat & Power)
* Liquid biofuels (but only when replacing oil-fired heating systems)
|
Renewable Heat System |
Scale |
Tariff (pence per kW/h) |
Tariff period |
|
SMALL installations |
|
|
|
|
Solar Thermal |
up to 20 kW |
18p |
20 years |
|
Air Source Heat Pumps |
up to 45 kW |
7.5p |
18 years |
|
Ground Source Heat Pumps |
up to 45 kW |
7p |
23 years |
|
Biomass Boilers |
up to 45 kW |
9p |
15 years |
|
Bio-Diesel (restricted use) |
up to 45 kW |
6.5p |
15 years |
|
Biogas on-site combustion |
up to 45 kW |
5.5p |
10 years |
|
MEDIUM installations |
|
|
|
|
Solar Thermal |
up to 20 - 100kW |
17p |
20 years |
|
Air Source Heat Pumps |
up to 45 - 350kW |
2p |
20 years |
|
Ground Source Heat Pumps |
up to 45 - 350kW |
5.5p |
20 years |
|
Biomass Boilers |
up to 45 - 500kW |
6.5p |
15 years |
|
Biogas on-site combustion |
up to 45 - 200kW |
5.5p |
10 years |
|
LARGE installations |
|
|
|
|
Ground Source Heat Pumps |
350 kW or more |
1.5p |
20 years |
|
Biomass Boilers |
500 kW or more |
1.6 - 2.5p |
15 years |
|
Biomethene Injection |
all scales |
4p |
15 years |
MCS registration & Solar Keymark exemption
The Microgeneration Certification Scheme (MCS) is an independent scheme that certifies microgeneration products (otherwise known as renewable energy systems)and installers, in accordance with consistent standards. It is designed to evaluate microgeneration products and installers against robust criteria providing greater protection for consumers.
Solar panels, such as Genersys, that already have the Solar Keymark are automatically approved for RHI and do not need to register with MCS.
How to Qualify & Other Criteria
Who can qualify for these incentives?
The Renewable Heat Incentive is for everyone, including households, landlords, commercial premises, farmers, schools, hospitals, care homes, new developments and more. The RHI can even be used by entire communities, coming together to invest in a renewable scheme from which they will all use the heat and share the income.
Anyone who installs a renewable energy system to produce heat after July 15th 2009 is eligible to claim the Renewable Heat Incentive. So, virtually any property in across the UK is eligible.
Claiming the tariffs?
You will not be able to claim the tariff until April 2011 when the RHI has been launched. However, any approved renewable energy system that was installed after July 15th 2009, will qualify.
The easiest way to get a renewable energy system and benefit from the Renewable Heat Incentive is to find a system provider who can supply the eligible products and manage the installation. They will also be able to act as an agent to claim the tariffs on behalf of the beneficiaries.
Systems installed before 15th July 2009
In Parliament on September 16th the Government confirmed that it had no plans to honour pre-election pledges to allow installations completed before July 15th 2009 to be eligible for the Renewable Heat Incentive.
Systems installed before April 2011
Systems installed after 15th July 2009 will be able to join the Renewable Heat Incentive scheme, but will only get paid for any generation from April 2011 onwards. Remember though, that you will still save on heating costs in the meantime.
Systems installed from April 2011 onwards
You will receive Renewable Heat Incentive payments from the date of registration and for the duration.
Measured or Calculated heat output
The RHI tariffs are paid based on the heat output of the renewable energy system you have installed and measured by metering and 'deeming' (which is a calculated estimate of the heat output). Current proposals are:
Small systems
The levels of payment will be based on a 'deemed' output based on what the installed system would be expected to deliver, if the property were well insulated.
The building's energy use will be assessed through the Standard Assessment Procedure (SAP)28 (or similar) to identify the heat demand of the building and assumes the building to already have a minimum energy efficiency and level of insulation.
Medium-scale installations
As with small-scale installations, there will be the option of adding a meter for solid biomass installations. If metering is chosen, the same tariff levels will apply for the same deemed number of kWh for the property. However, where the metered number of kWh used, exceeds the deemed number, an additional lower tariff per kWh would be paid to cover the excess.
Large-scale and process-heat
All payments will be made by calculating the metered number of kWh multiplied by the tariff per kWh.
Biomethane injection and district heating
It is proposed that this be metered at all scales.
Other criteria to ensure you qualify:
Certification
All equipment and installers must be MCS certified for all systems under 45kW, except biomass which is up to 300kW. Work is underway to extend these upper limits of MCS certification, to encompass more systems covered by the RHI.
Post-installation & Maintenance
To continue to qualify for RHI payments each year, the system owner will need to sign a declaration that they agree to meet their obligations, such as, maintenance or servicing of the system.
Ofgem may then require annual further declarations from the owner confirming that they continue to meet their obligations.
Unlike the Feed-In Tariffs, the Government has specified RHI systems need to be maintained, to ensure the system continues to work efficiently. Regular evidence of on-going maintenance and repair will probably be required and carried out by an approved/qualified person (although details have yet to be fully confirmed).
Insulation & Minimum energy efficiency criteria:
Any renewable system you install, will work more efficiently if your building is well insulated. This is best done, before or during installation of your renewable heating. If not, you will be generating more heat than you need to which is wasteful but will also lower your tariff income.
The deeming approach to measuring heat will be based on calculations which assume a basic minimum level of energy efficiency. For domestic houses, the present consultation proposes that this should be:
* at least 125mm of loft insulation
* cavity wall filled where appropriate
It has been suggested that this is too lenient and this may change when the Government publishes its response to the consultation.
The following technologies will not be eligible for the RHI
Boilers powered by liquid biofuels
Except where these specifically replace oil-fired boilers at homes, which are not connected to the gas grid (up to a capacity of 45kW). The government aims to prioritise the use of solid biomass for heating and liquid biofuels for transport applications
Wood burning stoves
Government states: These present practical difficulties as it is extremely difficult to monitor how much they are used (they are usually a secondary source of heat the use of which will be optional), and to what extent they are used with renewable fuel rather than, for instance, coal. The administrative cost of including these appliances in the RHI in a fair way would likely be very high.
Open fires, air heaters and 'similar applications'
For the same rationale as wood-burning stoves above.
Factors to consider when selecting a renewable energy technology
Remember that to be eligible, the products used and the installers who fit them also need to be accredited.
Roof space
Both solar electric and solar thermal heating systems are commonly mounted on the roof and require an unshaded area, with an ideal slope of 30 to 60 degrees facing roughly southwards. However, any roof can be accommodated to work effectively.
Ground area
Ground source heat pumps collect heat from coils buried in the ground and need a suitable area of garden or ground. Although boreholes need far less space, the location of any mains or other obstructions need to be confirmed.
Internal space
Many renewable systems are no larger than traditional heating boilers, and finding a suitable location is seldom a problem. It is often a good idea to install a larger hot water store as well.
Biomass boilers that use wood or pellets will need a dry fuel store, perhaps in a garage or outbuilding.
Closure of the Low Carbon Buildings Programme to new Applications
Effective from (06.00 am) Monday 24th May 2010
Support mechanisms, in the form of a Feed-In-Tariff for renewable electricity, introduced on 1 April 2010, means that LCBP is no longer required for electrical microgeneration.
It was anticipated that support for the proposed Renewable Heat Incentive for heat under LCBP would continue up until its proposed introduction in April 2011 however demand for grants has been unprecedented and we had very little unallocated funding remaining. It has been decided that by closing the programme now, these unallocated funds will contribute towards DECC’s overall savings.
Applications that were received before the programme was closed and which are currently considered by our programme contractor BRE will also not be effected by the closure. If they pass the standard due diligence test applied to all applications they will be honoured.


