Domestic Renewable Heat Incentive
Renewable Heat Incentive scheme is a UK Government initiative offering financial incentives to encourage householders and businesses to use renewable biomass energy instead of fossil fuel. If you participate in the Domestic Renewable Heat Incentive scheme and install a renewable heating system such as biomass boilers, the Domestic Renewable Heat Incentive tariff payments will be paid to you quarterly for 7 years. Renewable Heat Incentive payments are based on the amount of renewable heat energy you produce.
The basis of the Domestic Renewable Heat Incentive scheme is that the UK Government has set out its intention of achieving a target of 12% of heating being sourced from renewables such as biomass energy by 2020. This is part of its overall plan to reduce carbon emissions from homes and businesses and to minimise the effects of climate change. The Domestic Renewable Heat Incentive scheme is considered so important by the Government that the Department of Energy and Climate Change described it as ‘the first step in transforming the way we heat our homes’.
Phase 1 is the Non Domestic Renewable Heat Incentive scheme. The Domestic Renewable Heat Incentive scheme provides financial incentives to industrial, commercial, public sector and ‘not-for-profit’ organisations to install renewable heat generators or to produce biomethane. Non Domestic Renewable Heat Incentive tariffs are paid to eligible applicants every three months for 20 years.
Phase 2 of the Domestic Renewable Heat Incentive started on 9th April 2014. It applies to biomass boilers and stoves, solar thermal water heating systems, ground source and air source heat pump technologies. Domestic Renewable Heat Incentive tariffs are paid to eligible applicants every three months for seven years. The Domestic Renewable Heat Incentive scheme is available to homeowners and those who self-build new homes in England, Wales and Scotland.
Renewable energy – you know it makes sense
When almost every day we hear of gas and electricity energy prices rising at a rate way above general inflation, it makes sense to take control of your domestic energy consumption. Installing renewable energy technologies such as biomass boilers and participating in the Domestic RHI Scheme allows you to do that and at the same time you will:
- Save on your household energy bills
- Make money from the renewable energy you generate
- Protect your household budget against price rises
- Reduce your home’s carbon emissions
- Secure your future energy supply from sustainable sources
Domestic Renewable Heat Incentive Scheme
The Domestic Renewable Heat Incentive scheme applies to installations of renewable heating systems such as biomass boilers in single homes only. It opened to applications on 9th April 2014. Whilst the Domestic Renewable Heat Incentive scheme is available to all households, those off mains gas will have more to gain by reducing both their fuel bills and carbon emissions. This is because of the relative inefficiencies (compared to mains gas) of LPG, heating oil, coal or electricity in providing cost-effective heat and hot water for your home. Renewable energy heating systems which are eligible for the Domestic Renewable Heat Incentive scheme include:
- Biomass-only boilers
- Biomass wood-pellet stoves with integrated back boilers
- Solar thermal water heating systems (flat plate & evacuated tube systems only)
- Ground source heat pumps
- Air source heat pumps
All of these renewable energy heating systems provide space heating or space heating and hot water, except solar thermal which must provide hot water only, to be eligible. Where a renewable energy technology system provides space heating, it must do so through a ‘wet’ central heating system such as radiators to be eligible for the Domestic Renewable Heat Incentive scheme. Current estimates are that there are approximately four million households in the UK which don’t have access to mains gas and the Domestic Renewable Heat Incentive scheme is available to:
- private landlords
- social housing
- third-party owners of a domestic heating system and
- new self-build properties
Domestic Renewable Heat Incentive is open to anyone in the above groups who has installed eligible renewable heat technology such as biomass boilers since 15th July 2009. However, if you have installed it before 9th April 2014 you need to contact Ofgem directly, to make a ‘legacy application’.
Domestic Renewable Heat Incentive – Financial Incentives
Domestic Renewable Heat Incentive financial incentives will be paid quarterly for seven years, to the owner of the renewable heating system. Tariffs are at a set rate of ‘ pence per kilowatt hour’ of renewable heat energy generated. Domestic Renewable Heat Incentive tariffs for eligible renewable heating systems when the scheme was introduced on 9th April 2014 were: –
|Heating System||Tariff (p/kWh of Renewable Heat|
|To be eligible for the Domestic Renewable Heat Incentive, solar thermal panels must ONLY supply hot water for your home, whereas all of the other eligible renewable heating systems can provide space heating, with or without hot water. Domestic RHI scheme rules only apply to these renewable energy technologies if they use a ‘wet’ central heating system such as central heating radiators. Domestic RHI tariffs will not be paid for hot water intended for use in a swimming pool or hot tub.|
|Biomass Heating Systems||12.2 pence|
|Solar Thermal||19.2 pence|
|Ground Source Heat Pump||18.8 pence|
|Air Source Heat Pump||7.3 pence|
Based on a typical three bedroom house using 15,000 kilowatt hours of heat per year, installing a biomass boiler, the total annual Domestic Renewable Heat Incentive tariff will be:
kWh of renewable heat x tariff = Total annual Domestic Renewable Heat Incentive payment
15,000 kWh x 12.2 pence per kWh = £1,830 per year
This equates to tariff receipts of £12,810 over seven years but for a full picture, you should add to this your future savings in energy bills by switching to a cheaper fuel.
Degression – Changing Domestic Renewable Heat Incentive tariffs
Domestic Renewable Heat Incentive tariffs are set by the Department of Energy and Climate Change but they have to stay within the budget set for the Domestic Renewable Heat Incentive scheme and to do this, tariffs may be lowered for new applicants; this is called degression. Domestic RHI tariffs are subject to review every quarter and degression will be implemented when the uptake of the Domestic RHI scheme is higher than the approved budget.
The Domestic Renewable Heat Incentive tariff for biomass boilers and biomass stoves was reduced to 10.98 pence per kWh on 1st January 2015 and it will be reviewed again on 1st March, with any change introduced from 1st April. Domestic Renewable Heat Incentive tariffs for solar thermal water heating systems, ground source heat pumps and air source heat pumps were not changed on 1st January 2015 but as with biomass boilers, they are reviewed quarterly.
Once you have successfully joined the Domestic Renewable Heat Incentive scheme and started to receive Domestic Renewable Heat Incentive tariff payments, they will only change in response to changes in the Retail Price Index (RPI) and this will be announced on 1st April each year. Reductions in Domestic RHI tariffs in the future caused by degression will not affect householders who have already successfully joined the Domestic RHI scheme.
Typical costs per unit of fuel energy for a Biomass wood pellet boiler compared to other domestic fuels:
Typical Carbon Dioxide emissions for a Biomass wood pellet boiler compared to other domestic fuels:
Greg Barker MP (Minister of State for Energy and Climate Change) welcomes the Domestic Renewable Heat Incentive
Domestic Renewable Heat Incentive FAQs
Will Domestic Renewable Heat Incentive tariffs change?
Domestic Renewable Heat Incentive tariffs will change annually in line with the Retail Price Index (RPI).
Also, the Department of Energy and Climate Change (DECC) has announced that in order to control costs and encourage early take up, Domestic Renewable Heat Incentive tariffs may be reduced over time for new applicants to the scheme, this is referred to as degression. However, once an applicant has secured their tariff it will not be reduced due to cost control or degression; it will only be affected by changes in the RPI each year.
Any changes to tariff rates in the Domestic Renewable Heat Incentive scheme will be notified by tyhe Department of Energy and Climate Change but we cannot guarantee that any published tariff rates on this web site represent the very latest situation. If you are considering installing a renewable energy heating system such as a biomass boiler you should check with Ofgem first for current Domestic Renewable Heat Incentive tariffs, before making a decision.
Will I have to pay tax on the Domestic Renewable Heat Incentives tariffs I receive?
Will I have to install a meter?
- you have a back-up heating system, for example if you install a biomass boiler but you also have an oil fired boiler
- you have a heat pump capable of using a non-renewable fuel such as fossil fuels
- you have more than one renewable heating system, such as a number of biomass pellet stoves fitted with back boilers, in different rooms
- your biomass boiler or stove does not heat all of the property
- your home is occupied for less than half of the year. This includes second homes and tenanted properties which are expected to be empty for more than six months in a year.
What is the ‘Metering and Monitoring Service Package’ for Domestic Renewable Heat Incentive?
To help improve the performance of renewable heating systems such as biomass boilers, an extra incentive for those who opt for metering and monitoring service packages will be paid. This is £230 per year in respect of ground source & air source heat pumps and £200 per year for biomass boilers.
Can I install any type of renewable heating system?
Where can I find an approved domestic renewable energy installer?
Will I need an Energy Performance Certificate (EPC) before I apply for the Domestic Renewable Heat Incentive?
Additionally, for biomass boilers , ground source heat pumps and air source heat pumps , the Domestic Renewable Heat Incentive tariff payable to householders is calculated with reference to the estimated heat demand for the property as shown in the EPC. In other words, without an EPC the tariff payments due cannot be calculated, so it is very much in the applicant’s interest to ensure that an EPC is prepared.
Will I need a Green Deal Assessment before I apply for the Domestic Renewable Heat Incentive?
Renewable heating systems installed in new self-build properties are exempt from providing a GDA as recent Building Regulations would have applied to the property anyway.
If you have already had a GDA carried out on your home you will not need another one, simply quote your Green Deal Advice Report Number on your Domestic Renewable Heat Incentive application.
If I join the Domestic Renewable Heat Incentive scheme, what are my responsibilities?
- Keeping the renewable heating system and any metering system in good working order.
- Informing Ofgem if the heating system breaks down or isn’t working.
- Informing Ofgem if you sell your house whilst still receiving Domestic Renewable Heat Incentive scheme tariff payments.
- Advising Ofgem of any major changes to your renewable heating system. This includes any changes which result in you having to install a meter when one wasn’t previously required.
- Informing Ofgem of any changes in your circumstances which may affect your eligibility to receive Domestic Renewable Heat Incentive scheme tariff payments.
- Completing an annual declaration confirming that you have kept to the rules of the Domestic Renewable Heat Incentive scheme. Please note that domestic installations of renewable energy heating systems which are part of the Domestic RHI scheme will be randomly checked to ensure compliance with the scheme’s rules.
- Domestic users of biomass boilers will have to demonstrate that they have bought their biomass wood pellets from an authorised supplier who is on the Renewable Heat Incentive Biomass Suppliers List in order to ensure that the wood pellets being used satisfy the required sustainability criteria of the Renewable Heat Incentive scheme.
What documentation do I need to apply for Domestic Renewable Heat Incentive scheme?
- An Energy Performance Certificate (EPC) for your home.
- A Green Deal Advice Report to confirm that your home meets current loft and cavity wall insulation specifications.
- An MCS (Microgeneration Certification Scheme) certificate to confirm that the renewable energy heating system you are installing complies with the requirements of the MCS scheme and the Domestic Renewable Heat Incentive scheme.
- An Emissions Certificate for the renewable energy heating system you intend to install.
Will I have to repay any previous grants I have received before I apply for the Domestic Renewable Heat Incentive?
Who administers the Domestic Renewable Energy Incentive scheme?
What happens if I sell my property before the seven year Domestic Renewable Heat Incentive tariff period ends?
How do I find an installer for renewable energy technologies?
Renewable Technology and Green Deal Finance
If you are off gas grid and you have faulty electric storage heaters, check at www.affordablewarmthscheme.co.uk to see if you qualify for replacement storage heaters under Government’s the ECO Affordable Warmth Scheme.