What is the Renewable Heat Incentive Scheme?
Please Note: The Renewable Heat Incentive closed to new applications on 31st March 2022. The Boiler Upgrade Scheme will now take its place.
If you install a renewable heating system in your home you could be entitled to 7 years of cash payments from the UK Government.
The Renewable Heat Incentive (RHI) scheme was introduced by the UK Government to encourage more people to install renewable heating systems in homes and businesses. It was introduced in April 2014 as part of the government's ambition to reduce our reliance on fossil fuels and reduce our carbon emissions; this includes generating 12% of our heating from renewable energy sources.
What is the Renewable Heat Incentive?
Under the Domestic RHI scheme*, households in England, Wales and Scotland who install an eligible renewable heating system can benefit from receive quarterly cash payments for 7 years. The amount of money you receive is based on how much energy your system generates and calculated using a tariff which is updated regularly.
In past years, Ofgem would estimate how much energy your renewable heating was generating and pay you based on that figure. However, in 2018 Ofgem introduced changes to the scheme and in most cases a meter now needs to be installed at the same time as the technology. There are two types of metering that may be required depending on the technology you install: 'metering for performance' or 'metering for payment'.
- 'Metering for performance' is an eligibility requirement for all new heat pump applications (not other technology types).
- 'Metering for payment' is different, and depending on other circumstances, may be an eligibility requirement for heat pumps and biomass stoves and boilers.
Note: Solar thermal systems do not need to be metered.
*Commercial premises, such as businesses, schools or hospitals can apply for the Non-domestic RHI scheme.
Who can apply?
The scheme covers single domestic dwellings with an Energy Performance Certificate (EPC) but not new build properties (unless they are self-builds). You must apply within one year of the commissioning date of your system. The scheme currently accepts applications from owner-occupiers, self-builders, private landlords and registered providers of Social Housing who have installed eligible technology.
Eligible renewable heating systems
Biomass Boilers (wood-fuelled)
A biomass boiler is a lot like a traditional gas or oil boiler but it is fueled by wood pellets, chips or logs.
Biomass Pellet Stoves with integrated boiler
Biomass stoves burn compressed wood or biomass pellets to create a source of heat for the space in your home and with an integrated boiler can also heat water.
Ground-to-water heat pumps
Ground source heat pumps work by harnessing the natural heat via underground tubes which extract the heat so it can be used to produce hot water for your home.
Air-to-water heat pumps
Air source heat pumps look like air conditioning units and sit outside the home where they can extract natural heat from the air and provide heating and hot water around the home.
Solar thermal panels (flat plate or evacuated tube)
Solar thermal panels sit on your roof where they collect energy from the sun in tubes of fluid. This solar energy can then be used to heat water for a wet central heating system as well as your taps, baths and showers.
Get FREE renewable heating quotes
If you're interested in installing a solar thermal hot water system in your home, head over to our Solar Guide website for no-obligation quotes from MCS accredited solar companies in your area.
RHI Calculator: How much could you earn?
Once you are receiving domestic Domestic RHI payments, the rate you get will change annually. RHI rates are set by the UK Government and intended to financially compensate you for the cost and disruption of installing and operating a renewable heating system (when compared to installing and running a fossil fuel system in an off-grid household) on the basis of 20 years of heat produced.
As the tariffs are adjusted annually it is difficult to pin down exactly how much you could earn in RHI payments. However, to give you rough idea of potential earning, RHI applications submitted between 01 Jan. 2018 and 31 Mar. 2019 are entitled to the following RHI rates:
| Renewable Technology | Tariff (p/k Wh renewable heat) |
|---|---|
| Air-to-water heat pump | 10.49 |
| Biomass boiler | 6.74 |
| Ground-to-water heat pump | 20.46 |
| Solar thermal | 20.66 |
The amount of energy generated by your system will vary depending on its size and efficiency, but the below table uses some average energy demands for semi-detached homes to calculate potential annual earnings.
| Size of Home | 1-bed semi detached | 2-bed semi detached | 3-bed semi detached |
|---|---|---|---|
| Average annual heat demand (kWh) | 8,000 | 12,000 | 17,000 |
| Technology | Estimated Annual RHI Earnings | ||
| Air-to-water heat pump | £839.20 | £1,258.80 | £1,783.30 |
| Biomass boiler | £539.20 | £808.80 | £1,145.80 |
| Ground-to-water heat pump | £1,636.08 | £2,455.20 | £3,478.20 |
| Solar thermal | £1,652.80 | £2,479.20 | £3,512.20 |
The below table represents potential total earnings over the full 7 years of the scheme.
| Size of Home | 1-bed semi detached | 2-bed semi detached | 3-bed semi detached |
|---|---|---|---|
| Average annual heat demand (kWh) | 8,000 | 12,000 | 17,000 |
| Technology | Estimated RHI Earnings Over 7 Years | ||
| Air-to-water heat pump | £5,874.40 | £8,811.60 | £12,483.10 |
| Biomass boiler | £3,774.40 | £5,661.60 | £8,020.60 |
| Ground-to-water heat pump | £11,452.56 | £17,186.40 | £24,347.40 |
| Solar thermal | £11,569.60 | £17,354.40 | £24,585.40 |
Note: These example heat demands have been taken from an Ofgem letter to all retail energy-market participants, price-comparison websites, consumer groups and other interested parties in Aug 2017.
To see the latest RHI tariff, visit the Ofgem website.
How to apply for the RHI scheme
To apply for the RHI scheme you need to go through the Ofgem website or via their Domestic RHI Applicant Support Centre on 0300 003 0744. You'll need the following information to hand:
- MCS installation certificate number for the heating system
- Energy Performance Certificate (EPC) number
- Your bank details
- For heat pump applications you will also need the Seasonal Performance Factor (SPF) of the technology you're installing
- For systems which require metering you'll also need the Installer Metering Questions form.Unless your application requires a manual check, you should receive an almost immediate decision on the success of your RHI application.
More benefits of renewable heating systems
Renewable heating technologies can provide most if not all of the hot water you need to supply your home.
Our supply of fossil fuels like natural gas, coal and oil will not only run out in the near future, but also produce carbon emissions when burned causing significant damage to our environment. A renewable heating system uses renewable energy rather than fossil fuels to produce heat for your home. Renewable energy is harvested from our natural environment and will replenish in a human timescale.
In addition to receiving the RHI cash payments, by installing a renewable heating system in your home you can reduce your carbon footprint and (as renewable energy is free and you'll need to buy less from a supplier) could significantly reducing your energy bills.
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