Renewable Heat Incentive scheme confirmed

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Domestic Renewable Heat Incentive scheme confirmed

March 2013

RHI
Homeowners who are interested in installing renewable heating systems in their homes will now be able to benefit financially through the Domestic Renewable Heating Incentive (RHI), following state aid approval from the European Commission. 
 
From spring 2014, quarterly payments will be available for seven years following the installation of an eligible heating system, such as a biomass boiler, solar thermal panels and air or ground source heat pump. Although the up-front costs of a renewable heating system are generally higher than a conventional fossil fuel based system, the domestic RHI scheme is intended to bridge this gap and offers a generous financial incentive which should save homeowners in the long run.  
 
The tariffs have not been confirmed yet, but are anticipated to be 7.3p/kWh for air source heat pumps, 18.8p/kWh for ground source heat pumps, 12.2p/kWh for biomass boilers and between19.2 to 21.7p/kWh for solar thermal. By way of an example, if a homeowner were to install a biomass pellet stove boiler costing around £10,000, the RHI would pay approximately £2,000 - £3,000 per annum for 7 years, resulting in a total payback of up to £21,000. These payments will be exempt from income tax and index linked so they will increase annually over the 7 years. 
 
This scheme will work alongside the Green Deal, to ensure that renewable heating systems are installed into homes which are well insulated and energy efficient, so before applying for the scheme a homeowner must have a Green Deal Assessment carried out, install loft or cavity wall insulation (if applicable) and get an updated Energy Performance Certificate to verify these improvements have been made. The renewable heating system must be certified under the Microgeneration Certification Scheme (MCS), be new and have a commissioning date on or after 15 July 2009. 
 
Dan Thory from Fisher German comments "the details and eligibility of this scheme are fairly technical and need further explanation, however, the scheme will appeal to rural home owners off the gas-grid looking to replace a fossil fuel heating system. A renewable system will be cheaper to run over the long term. The RHI payments should cover the initial investment and easily pay for fuel and maintenance costs over the 7 year period”. 
 
Home owners who are interested in the scheme should call Fisher German in the first instance to discuss in more detail. They can also help gain accreditation on domestic and non domestic RHI schemes.
 
Please contact Rebecca Seaman 01858 411219 or Dan Thory 01858 411226 for further information.
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