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About the Domestic Renewable Heat Incentive

What is it?

The Domestic Renewable Heat Incentive (Domestic RHI) is a government financial incentive to promote the use of renewable heat. Switching to heating systems that use naturally replenished energy can help the UK reduce its carbon emissions.

People who join the scheme and stick to its rules, receive quarterly payments for seven years for the amount of clean, green renewable heat their system produces.

Who's it for?

The scheme is open to anyone who can meet the joining requirements (from July 2009). It‘s for households both off and on the gas grid. People off mains gas have the most potential to save on fuel bills and reduce carbon emissions.

Two schemes: Domestic & Non-Domestic

The Renewable Heat Incentive has two schemes - Domestic and Non-Domestic. They have separate tariffs, joining conditions, rules and application processes. Ofgem administer both. Each application can only be to one of the schemes.

The Domestic RHI

Key to joining is that the renewable heating system heats only a single property which is capable of getting a domestic Energy Performance Certificate (EPC) . The EPC is the proof Ofgem  needs that the property is assessed as a domestic ‘dwelling‘. Without one, you won‘t be able to apply and can‘t join the scheme.

An EPC gives information about a property‘s energy use, plus recommendations on how to reduce energy and save money. It‘s required every time you buy, sell or rent a property. It‘s included as part of a Green Deal Assessment, which is a requirement for most to join the Domestic RHI.

The Non-Domestic RHI

Generally, if the renewable heating system is in commercial, public or industrial premises, then you would apply to the Non-Domestic RHI. This can include small and large businesses, hospitals, schools, and organisations with district heating schemes where one heating system serves multiple homes.

Where it‘s more complicated

If your property set-up doesn‘t quite fit into standard descriptions, or if your renewable system supplies heat to more than one building, it can be more difficult to decide which scheme to apply to. (ie if you have a granny annex or holiday home) Or, if you‘d be eligible to join either.

Generally:

  • properties with a home office within a house that has, or can get a domestic EPC, should be eligible for the Domestic RHI.
  • properties with annexes attached to the house are normally covered by one domestic EPC and should be eligible for the Domestic RHI.
  • properties with a main house and a self-contained outbuilding (with its own bathroom and kitchen), both heated by a renewable heating system, would normally have an EPC for each. They would not be eligible for the Domestic RHI.
  • properties with a main house and other outbuildings all heated by a renewable heating system may not be eligible for the Domestic RHI.

 

For more information, see Ofgem‘s key terms explained: Domestic RHI

Eligible heating systems in the Domestic Renewable Heat Incentive

To be able to apply to the Domestic RHI you will need to check that your renewable heating system is one of the types eligible for the scheme and that it‘s a make and model that meets specific technical requirements. All Samsung air-source heat pumps are eligible. There are four eligible renewable heating system types. These are:

  • air-source heat pumps
  • biomass only boilers and biomass pellet stoves
  • ground source heat pumps
  • flat plate and evacuated tube solar thermal panels

 

RHI Step-by-Step

1.    research potential technologies

2.   contact Green Deal Assessor (gdorb.decc.gov.uk)

3.    receive EPC

4.    installer designs and installs MCS-accredited system

5.    payments begin after registering scheme with OFGEM


Tariff and Potential Income

The following tariffs and payments apply to projects registered in the first months of the scheme. DECC have stated that tariffs will be reviewed quarterly although, of course, if you sign up to a tariff, then it is guaranteed for seven years. These figures are based on project payments for systems with a house heat demand of 16,500kWh/year, which is the figure Ofgem deem 'typical.' Installation costs do vary significantly depending on the size of the system so this is an average.

 

TECHNOLOGY

 

 

TYPICAL COST

 

TARIFF (p/kWh)

 

TYPICAL ANNUAL PAYMENT

ASHP

£7,000

7.63

£1,024

Biomass Boiler

£12,000

3.85

£2,013

GSHP

£11,000

19.64

£3,102

Solar

£4,000

20.06

£300-400


Source for more information: Ofgem  24.01.17 & Homebuilding & Renovating 05.14