Renewable Heat Incentive

In November 2011, the UK Government launched the Renewable Heat Incentive (RHI) which sees a 20-year index linked payment for every kilowatt hour (kWh) of heat generated by MCS certified and installed solar thermal panels, heat pumps and/or biomass boilers.

NAVITAS can help you receive a government subsidy for installing a renewable heating system.

There are two separate RHI schemes; Domestic and Non-Domestic. 

The Domestic Scheme provides subsidy for 7 years according to the calculated heat use from the property’s EPC, and can be applied for where a renewable heating system provides space and/or water heating to a single, domestic premises.

The Non-Domestic Scheme can be applied for where the renewable heating system is serving any part of a property which serves a non-domestic purpose.  Properties meeting these requirements can be holiday lets, offices or home offices, annexes, workshops or agricultural buildings, as well as commercial warehouses and business premises.  Non-Domestic subsidies are paid over 20 years, according to metered heat use.  The Tier 1 tariff are paid for the first 1,314 hours of heat production, and the Tier 2 tariff is paid for any heat generated thereafter, underlining the importance of diligent system design.

Each scheme’s tariffs are subject to revision quarterly, however once an installation is accredited it is immune to these revisions. 

Current RHI tariffs are shown in the table below*:

NB: RHI for Solar Thermal collectors can only be claimed for hot water production.

There are currently three RHI-eligible, and approved, technologies suitable for domestic properties:

• Solar thermal panels are best suited to contributing to domestic hot water loads primarily in the summer months.
• Heat pumps (both air-source and ground-source) are best suited to well insulated buildings with low temperature heat distribution e.g. under floor heating
• Biomass boilers are suitable for all properties and can be fuelled by wood pellets, logs and wood chip. With fully automated systems, the wood pellet option offers storage similar to that of oil, yet works more efficiently and at a lower cost.

Worked RHI example 1

A property generating 40,000kwh from an 80% efficient 30kw oil boiler could expect to pay £1,750/year in oil fuel bills.

The same property using a 90% efficient 30kW biomass wood pellet boiler to meet the kWh load could expect to pay £2,035.56/year in fuel bills.

Registered for the Domestic RHI, this homeowner could expect to receive annual RHI payments of £1,872/year for 7 years.

If this property was paying business rates or two council tax bills, it could expect a Non-Domestic RHI payment of £1,289 /year for 20 years*. This would see a net benefit vs oil of £1,108/year

*Requirements = Energy produced is metered in kWh, and for the first 1314 hours (UK average peak load hours) a payment of 3.26p is received, and for subsequent kWh a payment of 0.86p is received.

Worked RHI example 2

A property generating 20,000kwh from an 80% efficient 15kw oil boiler could expect to pay £875/year in oil fuel bills*.

*Based on oil price @ 35p/litre

The same property using a 300% efficient 15kW Ground-Source heat pump to meet the kWh load could expect to pay £1,000 in fuel bills.

Registered for the Domestic RHI, this homeowner could expect to receive annual RHI payments of £2,577/year for 7 years, providing a net benefit vs oil of £2,452/year.

If this property was paying business rates or two council tax bills, it could expect a Non-Domestic RHI payment of £1,772/year for 20 years** providing a net benefit of £1,647/year.

Unretractable: As soon as the RHI is confirmed to the property, no change in law or government will affect the rate at the time of approval; the commercial RHI is protected and guaranteed by primary legislation for 20 years.

TAKE advantage of the government subsidy for renewable energy which now offers an affordable solution to everyone to reduce carbon emissions and generate renewable heat; so you can save and earn money at the same time.

Do you work from home? Do you pay business rates? Do you pay two or more council tax bills? Do you run a holiday let or B&B? Do you have a house and annex / office / workshop and / or barn? Could two properties share one boiler? Call NAVITAS as you could be eligible for the commercial subsidy.

In November 2011, the UK Government launched the Renewable Heat Incentive (RHI) which sees a 20-year index linked payment for every kilowatt hour (kWh) of heat generated by MCS certified and installed solar thermal panels, heat pumps and/or biomass boilers.

The RHI is a government subsidy for renewable heating set down as primary legislation. Once signed up it cannot be changed by this or future governments.

RHI is currently available as a ‘tariff’ to any property either paying two or more council tax bills or business rates, and as a one-off grant for domestic properties; and to install numerous heating systems.

RHI for biomass less than 200kW is currently 3.26p /kWh for up to 1314 hours x boiler rating kW.

**RHI Tariffs Correct as of September 2016

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