Renewable Heat Incentive is first in the world

Renewable Heat Incentive, RHI
The best rate for energy under the Renewable Heat Incentive is for solar thermal — at 8.5 p/kWh. (Photo: MHS Boilers)

The Government has announced details of its Renewable Heat Incentive, the first in the world, aimed at reducing carbon emissions from energy used to produce heat — about half the UK total. The RHI will come into effect in two stages. Phase 1 for non-residential buildings will be introduced in July 2011. Phase 2 for non-residential buildings will be introduced in Autumn 2012 to coincide with the advent of the Green Deal.

Air-source heat pumps are not included in the RHI, nor is gas-fired CHP. Among technologies that are included are biomass, solar thermal, ground-source and water-source heat pumps and deep geothermal.

The £860 million scheme is expected to increase green capital investment by £4.5 billion up to 2020 and increase the number of industrial, commercial and public-sector installations seven-fold by that time.

Until non-residential projects come within the scope of the scheme, over a quarter of the first year’s budget will be earmarked for up to 25 000 household installations through a premium payment.

Energy Secretary Chris Huhne said, ‘Renewable heat is a largely untapped resource and an important new green industry of the future. This incentive is the first of the kind in the world. It will help the UK shift away from fossil fuel, reducing carbon emissions and encouraging innovation, jobs and growth in new advanced technologies.’

The highest rate is for solar thermal installations of less than 200 kW thermal, at 8.5 p/kWh. Ground-source heat pumps smaller than 100 kW will get 4.3 p/kWh falling to 3 p/kWh for larger installations.

To avoid biomass installations being run wastefully, there is a 2-tier tariff based on a 15% load factor (1314 h a year at peak capacity). The rate for installations up to 200 kW is 7.6 p/kWh up to the 15% load factor and 4.7 p/kWh for installations up to 1 MW. For the rest of the year the rate is 1.9 p/kWh.

To qualify for the RHI, installations under 45 kW must be installed by a member of a microgeneration certification scheme. Larger installations will need to satisfy criteria to be determined by Ofgem. Eligible systems installed on or after 15 July 2009 will qualify retrospectively for the RHI, provided they have MCS certification.

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