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Renewable Heat Incentive

Renewable Heat Incentive (RHI)

This major new scheme provides financial support for renewable heat generation. This promises to be a huge boost to the wood fuel sector in Scotland.

Launch of  the   Renewable Heat Incentive

25th November 2011

DECC have formally opened the Renewable Heat Incentive (RHI) for industrial, commercial, public sector and not-for-profit and community installations.

Full information on the RHI  and the full guidance for applicants  who wish to apply can be found on DECC's website.

All wood fuel consumers who install (or have recently installed) a wood fuel system and use it to generate heat will be eligible for the scheme.

Note: if the system is owned by an energy services company (ESCo) they will be eligible for RHI, not the consumer.

Key features of the scheme:

  • System of tariffs based on amount of heat generated
  • Quarterly payments for 20 years from the date consumers enter the scheme
  • All installations since 15 July 2009 will qualify for support
  • Until October 2012, domestic consumers will only be eligible for some financial support towards the cost of installation (Renewable Heat Premium Payment)

RHI regulations are published here

Ofgem have published guidance for anyone involved with the RHI and sets out how Ofgem will administer the scheme.
Ofgem guidance is published here

Ofgem also have an enquiries line: 0845 200 2122 open 8:30am until 5pm Monday to Thursday, and 8:30am until 4:30pm on Fridays.
Alternatively, email RHI.Enquiry@Ofgem.gov.uk

Biomass tariffs

For small and medium scale biomass there will be a tariff breakpoint at 1314 peak load hours per year. Below this, small biomass will receive 7.6p/kWh and medium biomass will receive 4.7p/kWh. Above this both will receive 1.9p/kWh. Large biomass receives a flat rate of 1p/kWh, see update above.

The first phase payments will be based on metered heat.

RHI tariffs are published here

Phased introduction

Phase 1

In the first phase, long-term tariff support will be targeted at the big heat users - the industrial, business and public sector - which contribute 38% of the UK's carbon emissions. Under this phase there will also be some support for households through the Renewable Heat Premium Payment.

In this phase, payments will be based on metered heat. Deeming will not be included.

Phase 2

The second phase will see households moved to long-term tariff support similar to that offered to the non-domestic sector in the first phase. This transition will be timed to align with the Green Deal which is intended to be introduced in October 2012.

Reporting

Biomass installations of 1 MWth capacity and above will be required to report quarterly on the sustainability of their biomass feedstock for combustion and where they are used to produce biogas. This information will include the amount of biomass used, its type and form, country of origin and whether an environmental accreditation has been met.

Full details of the Renewable Heat Incentive are on the Department of Energy and Climate Change website.

The Biomass Energy Centre (BEC) has produced calculator which will allow you to estimate your RHI payments and savings from woodfuel boiler installation. Please note that this is currently for non-domestic installations only.

You can download the BEC RHI Calculator (Excel spreadsheet) here.