Press release

The heat is on for householders

Householders could be paid hundreds of pounds a year for generating heat by solar thermal panels, biomass boilers and heat pumps.

Householders could get paid hundreds of pounds a year for heat generated by solar thermal panels, biomass boilers and heat pumps, Energy and Climate Change Minister Greg Barker confirmed today.

The tariff levels have been set at 7.3p/kWh for air source heat pumps; 12.2p/kWh for biomass boilers; 18.8p/kWh for ground source heat pumps and at least 19.2 p/kWh for solar thermal.

The new Renewable Heat Incentive (RHI) for householders is designed to drive forward uptake of renewable heat technologies in homes across Great Britain to cut carbon, help meet renewables targets and save money on bills. The scheme is a world first, and has been up and running for the non - domestic sector since November 2011.

Today’s announcement follows extensive consultation on how a financial incentive would work best for householders and takes into account lessons learned from the Renewable Heat Premium Payment grant scheme (RHPP) and the RHI non domestic scheme.

Greg Barker said:

“The Coalition is committed to helping hardworking families with the cost of living.

“Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the Coalition is 110 percent committed to boosting and sustaining growth in this sector.”

Eligible applicants

The scheme will be made available to homeowners, private and social landlords, third party owners of heating systems and people who build their own homes. Anyone who has installed a renewable heat technology since 15 July 2009 and meets the scheme eligibility criteria will be able to join the scheme.

Eligible technologies

RHI domestic will support air to water heat pumps; biomass only boilers and biomass pellet stoves with back boilers; ground and water source heat pumps; flat plate and evacuated tube solar thermal panels.

Tariff payments

Payments will be made on a quarterly basis for seven years. The tariffs have been set at a level that reflects the expected cost of renewable heat generation over 20 years. In most cases, payments will be made based on estimated heat demand of the property. DECC will offer an extra set payment of £230 per year where consumers take out metering and monitoring support packages for heat pumps and £200 for biomass boilers.

Scheme requirements

Applicants will need to complete a Green Deal Assessment before submitting their application and must ensure they have met minimum loft (250mm) and cavity wall insulation requirements, where appropriate. All installations and installers must be MCS certified (or certified by an equivalent scheme). MCS certified installers are currently required to be members of the Renewable Energy Consumer Code, which is backed by the Trading Standards Institute.

Covering the upfront costs of renewable heating kit

Householders may be able to get help with the upfront costs of the renewable heating kit under the Government’s Green Deal. The Green Deal lets people pay for energy efficiency improvements including renewable heating systems through savings on their energy bills and householders are able to take up Green Deal finance and claim the RHI payments. Money off vouchers are also available under the RHPP scheme. Householders who receive money under RHPP will have this amount deducted from any future RHI payments to avoid a double subsidy.

The RHI for householders will be administered by Ofgem and more details on how to apply will be published in due course. Pre-application enquiries should be directed to the Energy Saving Advice Service on 0300 123 1234.

DECC is currently finalising the details of the expansion of the non-domestic RHI scheme and will confirm the way forward in the autumn alongside the outcome of the tariff review. DECC’s aim to introduce these changes from Spring 2014 remains unchanged.

Government has also published the response to the consultation on revisions to the Combined Heat and Power (CHP) Quality Assurance programme which determines eligibility of this technology for support under the Renewables Obligation. The changes will apply to new CHP plants and will come into effect on 1 January 2014.

Notes for Editors

  1. RHI documents
  2. The final scheme design is subject to State Aid and Parliamentary approval.
  3. The RHI for householders is funded by general taxation and is targeted at but not limited to homes off the gas grid.
  4. The support under RHI domestic is set at a level designed to compensate for the difference between the cost of installing and operating renewable heating systems and fossil fuel eg. gas fired systems, including non-financial costs such as disruption, on the basis of 20 years of heat produced. The fossil fuel costs used for this purpose are those faced by households off the gas grid.
  5. The solar thermal tariff is capped by reference to an assessment of the marginal cost of renewable energy. The tariff will be at least 19.2p but may be higher depending on the outcome of further work. The announcement on the final tariff will be made in the Autumn.
  6. Annual payments will be worked out by multiplying the expected annual heat use by the technology’s tariff rate. Tariffs will change annually in line with the Retail Price Index (RPI). All public grants, and not just the RHPP, will be deducted to avoid a double subsidy. 7.DECC will confirm the way forward on a proposed budget management approach for the RHI domestic in the Autumn.
  7. More details on how to apply for the RHPP scheme
  8. Pre-application enquiries should be directed to the Energy Saving Advice Service (ESAS) on 0300 123 1234.
  9. CHPQA documents can be found on GOV.UK

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