Renewable Heat Incentive

The Renewable Heat Incentive (RHI) is an exciting new financial support scheme for the production of renewable heat.

The RHI provides a regular payment for the production of renewable heat.  Heat produced from a biomass boiler in a commercial application is ‘metered’, and ‘deemed’ in a domestic application.

 

Commercial

The RHI for commercial installations is now open for applications.

Apply online via Ofgem: http://www.ofgem.gov.uk/e-serve/RHI/howtoapply/Pages/howtoapply.aspx

Tariff rates are given below:

Boiler Size	Tier 1 Rate	Tier 2 Rate
< 200kW	7.9p/kWh	2.0p/kWh
> 200kW	4.9p/kWh	2.0p/kWh

The Tier 1 rate applies annually up to the tier brake, tier 2 above the tier brake.  The tier brake is installed capacity x 1314 peak load hours (i.e. kW rating of boiler x 1314).

The tariff is index linked for 20 years and will be paid quarterly.

 

Example

An 80kW biomass boiler produces 144,000kWh of heat a year (assuming 1800 peak load hours).

Tier 1 payments are made on 80kW x 1314peak load hours = 105,120kWh @ 7.9p/kWh

Tier 2 payments are made on the remaining heat produced 144,000 – 105,120 = 38,880kWh @ 2.0p/kWh

The total annual payments would therefore be (105,1200kWh x 7.9p) + (38,880 x 2.0p) = £9,082.08/annum

 

Domestic

The RHI for domestic installations is due to start in October 2012.  Any eligible installation after July 2009 is eligible for the payments from the commencement of the scheme.

Tariff rates have not yet been published for domestic installations, however we would expect these rates to be inline with the commercial tariffs.