Forestry Commission Scotland logo
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.

The Renewable Heat Incentive

DECC formally opened the Renewable Heat Incentive (RHI) on 25th November 2011, for industrial, commercial, public sector and not-for-profit and community installations. The domestic RHI was launched on the 9th April 2014.

Full information on the non domestic RHI and guidance for applicants can be found on DECC's website here, information for the domestic RHI can be found here.

All wood fuel consumers who install (or who 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 for the non-domestic RHI, from the date consumers enter the scheme, quaterly payments for 7 years for the domestic RHI from date of entry.
  • All eligible installations since 15 July 2009 will qualify for support
  • The scheme does not cover biomass direct air heating, only heat produced via the medium of hot water.

RHI regulations are published here

Applicants for the domestic RHI will need to complete a Green Deal Assessment before submitting their application and must ensure they have met minimum loft (250mm) and cavity wall insulation requirements, where appropriate. All installations and installers must be Microgeneration Certified Scheme certified (or certified by an equivalent scheme).

 

Biomass tariffs:

RHI non domestic tariffs are published here

For the domestic RHI the tariff level is set at 12.2pkWh for Biomass-only boilers and biomass pellet stoves with integrated boilers.

RHI & Combined Heat and Power (CHP):

A new renewable CHP installation currently has two options through which to receive support:

New CHP stations accredited on or after 1st April 2015 will receive support from a combination of the RO and RHI.

Guidance:

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

For full details on how to apply for the RHI see the How to Apply webpage click here to access. This page includes the following:

·         sight of all the questions in the application form so you can prepare in advance.

·         a checklist and help with answering some of the key questions

·         screenshots and step-by-step instructions on how to use the RHI Register.

For those already accepted onto the scheme Ofgem has also provided a Guide to Meter Readings and Your Responsibilities, click here to access the page.

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

Sustainability Criteria:

In order to ensure the sustainability of biomass fuel, sustainability criteria for the Governments Renewable Heat Incentive scheme, will dictate that, from 2014, in order to be eligible for the RHI, biomass installations will be required to demonstrate, either through reporting or sourcing from an approved supplier, that their biomass fuel meets a minimum 60% GHG emission saving relative to EU fossil fuel heat average and land criteria which correspond to meeting the UK Timber Procurement Policy.

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.   DECC intends to implement land-use sustainability criteria by 1 April 2015.

Metering:

Metering requirements were simplified in September 2013 -only the minimum number of meters necessary to calculate the RHI payment are now required. They also allow heat loss from external pipework to be disregarded (in certain circumstances) where can be considered it properly insulated. In addition, applicants who can prove that it is either physically or financially overly burdensome to install a heat meter, will instead be allowed to submit a heat loss calculation in place of installing additional meters.

Emissions Limits:

For RHI accreditation of any new biomass installations from the 24th of September 2013, Ofgem will require proof that the boiler complies with flue emissions limits of 150g/GJ of nitrogen oxides and 30g/GJ of particulates. Ofgem have not yet confirmed exactly how they intend to police this.

From September 2013, all applicants with biomass boilers will need to submit an RHI emission certificate or a valid environmental permit with their application. For further information, see the Ofgem website, click here to access.

Boiler Re-location:

Accredited installations can be relocated, providing the installation meets the necessary requirements at its new location.

Enhanced Capital Allowances and the RHI:

While there is nothing in the RHI Regulations that prevents applicants applying for ECA in addition to the RHI, HMT has recently changed the rules regarding eligibility for ECA.  Following their consultation into  Capital Allowances: Feed-in Tariffs and the Renewable Heat Incentive, HMRC states that: "From April 2012 (or April 2014 for CHP installations) ECAs will not be available in respect of expenditure on plant or machinery when it generates electricity or heat (or produces biogas or biofuels) that attracts tariff payments under either of the FiTs or RHI schemes. ECAs may still be claimed (subject the other conditions of the ECA schemes) in respect of expenditure on such equipment as long as no tariffs are paid. Any ECAs given, in respect of expenditure incurred from April 2012 (or April 2014 for CHP installations), will be withdrawn if FITs or RHI tariffs are paid subsequently."

For further details, please follow this link or contact HMRC directly

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