Renewable Heat Incentive

  • General

  • Domestic RHI

  • Non-Domestic RHI

General

The Renewable Heat Incentive (RHI) was set up by the UK Government to encourage the uptake of renewable energy in heating systems through financial incentives.  First launched in April 2014, it provides cash payment to both domestic and non-domestic (commercial) users, albeit under slightly different rules.

Although the RHI covers a number of heating systems, this page will discuss only those aspects that apply to heat pumps.

Domestic RHI

Period.  The Domestic RHI payments are made quarterly over seven years, indexed linked to the CPI.  The Department of Business, Energy and Industrial Strategy (BEIS) has an RHI payment calculator that can estimate the amount you might receive for a property. Use the link below to access the calculator.

Eligibility.  Owner occupiers, builders, private landlords and providers of social housing who have installed renewable energy may apply. To qualify for RHI, all of the following must apply:

  • The property must have received an EPC prior to installation.
  • The renewable heating system must be listed on the product directory of the MCS website.
  • The installer must be accredited and in date with the MCS installer list.
  • The application for RHI must be within one year of the commissioning date of the system.

Non-Eligibility. The following do not qualify for RHI:

  • New build properties (other than self-build projects).

Heat Demand Limit. This is the level of annual heat demand in respect of which any household can receive support. Set at 20,000 kWh for ASHPs,  and 30,000kWh for GSHPs.

Assignment of rights. This allows an investor to help fund the purchase, installation and maintenance, of a household or landlord’s renewable heating system. Households and landlords are then able to assign their RHI payments to the investor, who is referred to in the RHI Regulations as the “nominated” investor.. This change came into effect on 27 June 2018.

Tariff.  The tariff rates as at July 2019 for heat pumps are as follows:


Air Source
Heat Pump

Ground Source
Heat Pump

Tariff p/kWh

10.71

20.89


Non-Domestic RHI

The non-domestic RHI differs in two principle ways from the domestic RHI:

  1. Payments are over 20 years (on a different schedule of tariffs)
  2. Heat is metered rather than "deemed"

Eligibility. 

  • You must be the owner of the installation, or have permission to act for the owners.
  • The heat pump CoP must be at least 2.9 and the overall SPF must be at least 2.5.
  • Only heating must be metered (not cooling).
  • Must measure electrical input into the pump.
  • Must not use heat which has been expelled from the building or other source.
  • MCS certification required for schemes of less than 45kWth.
  • No public funds can be used for the installation unless they have been repaid.
  • The plant must be new at the time of installation.
  • Must provide heat to more than one domestic premises, but can be used for multiple premises (district heating system).
  • Must include the correct type of meters.

Tariff. 


Air Source
Heat Pump

Water/Ground Source
Heat Pump

Tariff p/kWh

2.75

Tier 1*: 9.56
Tier 2*: 2.85

*Tier 1 payments are for the first 1,314 hours of use in any year, ie a 100kW system will attract Tier 1 payments for the first 131,400kWh of delivery, and Tier 2 rate thereafter.

The performance figures for Aquarius are truly impressive, the build quality is reassuringly high, and the price is unbeatable.

Carl Benfield, Director