Renewable Heat Incentive plans announced

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Renewable Heat Incentive plans announced

March 2011

renewable energy news

On 10th March the Government announced details of the long awaited Renewable Heat Incentive. The £860 million government scheme, the first of its kind in the world, will provide long term support for renewable heat technologies.  

The Renewable Heat Incentive scheme will be introduced in two phases. The first phase is to be introduced in 2011 and will be targeted at industry, commerce, the public sector, not-for-profit organisations and communities. The second phase of the scheme will be implemented in 2012 and will include the delivery of long term support for the domestic sector.
 
The Renewable Heat Premium Payment will also be introduced in 2011. This £15 million fund will be used to subsidise the cost of installing qualifying renewable heating systems in households.  It is anticipated that the Renewable Heat Premium Payment will be launched in July 2011 and further announcements are expected in May 2011.
 
The proposed tariffs have been calculated to provide a return on the additional capital invested of 12 per cent.  Renewable Heat Incentive will be paid on the basis of multiplying the metered renewable heat by the relevant tariff.
 
The tariffs have been set for the majority of technologies, however “tiered” tariffs have been introduced for small and medium-scale biomass. Biomass installations will receive a higher tier 1 tariff for the initial proportion of generation, reducing to a lower tier 2 tariff when generation exceeds the “Tier Break”.
 
Payments will be made to eligible technologies for a period of 20 years. Once in the scheme, the level of support will be guaranteed, providing certainty to those investing in renewable heat installations.
 
Rebecca Seaman of Fisher German comments “The Government announcement has provided welcome certainty for those looking to invest in renewable heating technologies. The Renewable Heat Incentive provides the opportunity for rural businesses to harness the benefits of renewable heat on a sound economic basis. For example a biomass boiler providing heat to a large farm and outbuildings at an installed cost of £125,000 would receive a subsidy payment in the region of £16,000 per annum.”
 
For further information on renewable heat technologies and the Renewable Heat Incentive (RHI) Scheme, contact Rebecca Seaman on 01858 410200 email rebecca.seaman@fishergerman.co.uk.
 

 
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