Renewable Heat Incentive (RHI)
The Renewable Heat Incentive (RHI) is the world’s first long-term financial support programme for renewable heat.
We launched the RHI in November 2011 with a scheme for the non-domestic sector that provides payments to industry, businesses and public sector organisations. We have now set out plans for providing longer term support for homeowners in ‘Renewable Heat Incentive: the first step to transforming the way we heat our homes’.
We plan to open the household scheme in spring 2014, but in the meantime domestic customers should read our guide on the Renewable Heat Premium Payment scheme for details of the householder voucher scheme that is currently available. The RHPP scheme has been extended for a further year to March 2014 to provide continued support for households until the domestic RHI is introduced.
The RHI pays participants of the scheme that generate and use renewable energy to heat their buildings. By increasing the generation of heat from renewable energy sources (instead of fossil fuels), the RHI helps the UK reduce greenhouse gas emissions and meet targets for reducing the effects of climate change.
The RHI is the main scheme of our heat strategy.
Delivering the RHI
|Pre-application enquiries by ESAS in England & Wales: 0300 123 1234||Ofgem deliver scheme|
|Or contact Home Energy Scotland: 0808 808 2282||Guidance on www.ofgem.gov.uk|
|Ofgem to deliver scheme - guidance will be available soon||RHI enquiry line: 0845 200 2122|
|Check www.ofgem.gov.uk||Email firstname.lastname@example.org|
The non-domestic RHI scheme
The non-domestic RHI scheme has been open to commercial, industrial, public sector, not for profit and heat networks since November 2011. The scheme is designed to bridge the gap between the cost of fossil fuel heat installations and renewable heat alternatives through financial support for owners.
Consultations on the non-domestic RHI
It is vital that we get the level of support right so that the market can invest with confidence, cost reductions can be achieved and the market can grow sustainably. Since the start of the scheme we have been able to collect more data and gather additional evidence from industry on heat usage assumptions, appropriate tariff levels and the practical application of the scheme. We have held a number of public consultations to gather feedback on improvements to scheme design, inclusion of more technologies and an increase in some tariff levels. These are summarised in the table below:
|Title||Consultation launch||Aim||Government response||Link to policy|
|Providing certainty, improving performance||July 2012||Providing greater certainty to participants and improving the application process||February 2013||Government response|
|Expanding the non-domestic RHI||September 2012||Expanding the scheme to include additional technologies||December 2013||Consultation|
|Air-water heat pumps and energy from waste||September 2012||Collect views on including AWHP in RHI and broadening eligibility criteria for EfW||December 2013||Consultation|
|Calls for evidence - biopropane, ground source heat pumps and landfill gas and large biomass||September 2012||Collecting evidence and information to confirm or inform assumptions for support in the RHI||December 2013||Consultation|
|Revising certification criteria for renewable Combined Heat and Power schemes||December 2012||Revising certification criteria for biomass, bioliquid, biogas and waste fuelled Combined Heat and Power (CHP) schemes||July 2013||Government response|
|Early Tariff Review||May 2013||Reassessing tariff levels through new evidence and intelligence on cost data and heat usage assumptions||December 2013||Consultation|
Further details on how the non-domestic RHI scheme has developed over time is available in
Proposed changes to the non-domestic RHI
The government response published on 4 December 2013 sets out a series of improvements and increased support under the non-domestic scheme. Response documents for the three consultations are available below:
- Expanding the non-domestic scheme
- Air to water heat pumps and energy from waste
- Non-domestic RHI early tariff Review
Key features of the new policy are:
- An increase in support for renewable CHP, large biomass boilers (over1MW), deep geothermal, ground source heat pumps, solar-thermal and biogas combustion;
- New support introduced for air-water heat pumps and commercial and industrial energy from waste;
- An evolved approach to budget management, using improved market intelligence to allow credible growth rates across the range of renewable heating technologies supported, whilst ensuring that the scheme remains affordable and achieves value for money
We estimate the policy changes set out here could incentivise around 5,000 non-domestic installations and an additional 6.4TWh of renewable heat by the end of 2015/16.
A summary of revised tariff levels and other policy changes are included in the fact sheet below. Full details can be found in the Government Response.
These proposed changes, which we aim to bring into force in spring 2014, are subject to State aid requirements and other approvals.
Biomethane injection tariff review
The biomethane injection tariff is to be reviewed following representations from industry that there is a risk of overcompensation for large biomethane to grid plants under the current Renewable Heat Incentive (RHI) biomethane injection tariff.
Larger plants benefit from economies of scale which can make them efficient generators of renewable energy, but their costs may not justify support at current levels.
DECC has undertaken initial analysis of the evidence underpinning the tariff and has concluded that there may be a risk of overcompensation for large plants or sites with existing assets. This represents a value for money risk for the taxpayer.
It is vital that we get the level of support right so that the market can invest with confidence, RHI support is spent efficiently and the market can grow sustainably. On 28 February 2014 DECC confirmed that it has initiated a review of the biomethane injection tariff.
As part of the review, DECC will be updating the cost and performance data underpinning the tariff to determine whether any changes are required. If it is concluded that changes are needed, DECC plans to consult on these in the summer.
Air quality emissions limits for biomass boilers and CHP
In March 2011 the Government published its policy for the non-domestic RHI, including the intention to introduce air quality emission limits for biomass boilers (including CHP) that participate in the scheme. Proposed limits were first published for consultation in 2010. These limits were confirmed earlier this year, with the maximum permitted emissions being 30 grams per gigajoule (g/GJ) net heat input for PM and 150g/GJ for NOx.
As of 24 September 2013, if you are planning to apply for the non-domestic RHI with a biomass boiler (including CHP) your installation will need to have emissions levels no higher than 30 grams per gigajoule (g/GJ) net heat input for PM and 150g/GJ for NOx. Proof that your system does not exceed these limits will need to be provided to Ofgem on application and be in the form of either an RHI emissions certificate or an environmental permit. Ofgem will contact you if this certificate is incomplete, which could delay your accreditation process. Ofgem will also retain the information on the certificate to support their auditing process in the future.
Our air quality factsheet answers a number of frequently asked questions and an example of an emissions certificate so you can ensure that the certificate you plan to submit meets the scheme requirements. If you submit an incomplete certificate it will delay your accreditation, therefore it may be advisable to check with your installer or boiler manufacturer to confirm your boiler’s RHI emissions certificate meets the requirements of the scheme.
When these regulations first came into force on 24th September, there was a minor discrepancy that meant that it was not possible for every type of boiler to meet the standards as originally drafted.
The regulations have now been rectified so that they deliver the full policy intent. The amending regulations have completed their passage through Parliament and came into force on 13th December 2013.
Metering and minor regulatory changes
As of 24 September 2013, there are new regulations in place that modify the eligibility requirements regarding metering in the non-domestic scheme, which also provide flexibility in the way in which heat loss in a heating system can be calculated.
This includes the use of heat loss calculations where it is not appropriate to install meters, and participants will also be able to disregard heat loss from external pipes that are less than 10 meters in combined length providing they are insulated to the specified standards. Equivalent pipes over 10m in length will be able to use heat loss calculations in place of metering.
In addition, the regulations make a number of small amendments which include:
*allowing accredited installations to be moved to different locations; * clarifying that water in the ground may be used as an energy source by a ground source heat pump; * making outdoor commercial cleaning and drying processes eligible for the scheme; and * allowing RHI installations to be used as the assessment installation when installers join the Microgeneration Certification Scheme (MCS).
The domestic RHI scheme
On 12 July 2013 we set out the policy framework for introducing longer term support for households ‘Renewable Heat Incentive: the first step to transforming the way we heat our homes’. Alongside this we published the government response to the consultation, RHI: proposals to launch a domestic scheme, and the associated impact assessment.
The scheme is for householders looking to replace their current heating system with a supported renewable heat technology and householders who have installed a renewable heat technology since 15 July 2009. The domestic RHI will pay owners the following:
|Technology||ASHP||GSHP||Biomass boilers||Solar thermal panels|
|Tariff||7.3p/kWh||18.8p/kWh||12.2p/kWh||At least 19.2 p/kWh|
The 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 non-domestic RHI.
Other documents published alongside the domestic RHI policy framework and government response include two technical guidance documents which provide further information on metering ‘Metering for Payment Technical Supplement’ and the ‘Metering and Monitoring Service Packages Technical Supplement’. We have also published a guidance document which sets out the process by which technologies become eligible for the RHI, Renewable Heat Incentive New technologies: process towards eligibility.
At the time of the July announcement we still needed to finalise when legacy applicants would be able to apply for the scheme, the details of how we would manage the domestic RHI budget, treatment of some types of subsidy and confirmation of the solar thermal tariff. These details are now set out in ‘Further details of the domestic Renewable Heat Incentive’, which was published on 4 December. This document also provides an update on implementation of the biomass sustainability requirements.
If you have any questions about the domestic RHI scheme please contact the Energy Saving Advisory Service on 0300 123 1234.
Training voucher scheme to help cross-skill heating engineers to renewable heating systems
This is a £650,000 fund aimed at expanding the skill set of domestic heating engineers to include the installation and maintenance of renewable heating systems. This is an important step to boost the installer base and supply chain in the run up to the launch of the domestic renewable heat incentive.
Giving consumers and installers reliable information is an important part of helping them make decisions about their heating system. With the launch of the domestic renewable heat incentive due Spring 2014, it is an important time to ensure that consumers have a range of installers to consult, and that these installers are trained to the very latest standards.
Funding the RHI
As the RHI is a demand-led scheme, we need a way of incentivising deployment whilst controlling costs to ensure the scheme remains affordable within the budgets agreed across Government. After consulting last summer, we implemented in April this year, a transparent budget management mechanism which ensures that budgets are sustainable over the period April 2013 – March 2015. We publish monthly data on scheme uptake and reduce tariffs, where necessary, on a quarterly basis. We will make any necessary adjustments to our approach to budget management in response to decisions on:
- the proposals for tariff increases in the 2013 Tariff review consultation;
- expansion of the current non-domestic scheme proposed in September 2012 consultation;
- introduction of the domestic RHI; and
- DECC’s budget for 2015/16
Budget management of non-domestic RHI
In April 2013 we implemented a long-term budget mechanism for the non-domestic RHI scheme (degression). Under this mechanism we will reduce the tariffs paid to new RHI recipients if uptake of the scheme is higher than expected, and more than is affordable.
Quarterly forecasts, including previous publications, and monthly updates are available on the ‘RHI mechanism for budget management: estimated commitments’ page. You can also find the methodology which DECC will use to determine whether any tariff reductions are needed.
The Office of the Gas and Electricity Markets (Ofgem) also provides information on actual payments to date and numbers of accredited installations.
Further information and how to apply
Visit the Ofgem E-Serve: Renewable Heat Incentive website for more information on the programme, including how to apply and eligibility.
Telephone: Ofgem E-Serve RHI Enquiries: 0845 200 2122, Monday to Thursday 8.30am to 5pm and Friday 8.30am to 4:30pm.