The Renewable Heat Incentive (RHI)

With ever-rising fuel costs, we often get asked about renewable heating options.

The good news is that renewable sources, such as biomass boilers, ground source heat pumps and photovoltaic panels not only provide alternative options where conventional supplies are expensive or unavailable, they also attract favourable support programmes which deliver impressive financial benefits, too.

Recent updates to the RHI scheme - extending it to domestic as well as non-domestic dwellings - mean that more properties than ever can benefit from brilliant returns on investment.

The Renewable Heat Incentive (RHI) is the world’s first long-term financial support programme for renewable heating. The RHI pays participants of the scheme that generate and use renewable energy to heat their buildings, instead of fossil fuels. The non-domestic scheme has been operating for a few years now, but from April this year, the RHI was extended to cover domestic dwellings as well.

Under the domestic scheme, Ofgem makes payments to participants over a period of 7 years, per unit of heat generated, although the rates are calculated using the expected 20-year life of the system as a base. The amount of heat generated from your installation is an estimate of the property's expected annual heat usage; this figure will be taken from the energy performance certificate (EPC) done as part of a green deal assessment.

For example, if you installed a 20kW biomass boiler (at an approximate capital cost of £18,000) in a home with an expected annual heat demand of 34,000kWh, at the current rate, you’d receive an annual payment of £4,148, which would equate to a tax-free sum of £29,036 over the seven-year period. Not a bad return on your investment.

There’s a slightly different calculation for non-domestic installations, and incentives are made over a 20-year period, but there’s an equally impressive pay-off. A 60kW biomass boiler (approximate capital cost £35,000) with an assumed annual heat load of 88,840kWh would attract an annual Ofgem payment of £6,842.56, which equates to £136,851 (tax free) over 20 years!

For more information on RHI and renewable heating options, speak to Stuart Harvey on 01524 771377. Stuart gives independent and professional advice to all our clients about their energy usage.