What is the renewable heat incentive in the uk?

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By Sarah Watts
Updated on Thursday 15 December 2022

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The government’s Renewable Heat Incentive UK scheme is aimed at incentivising those who currently rely on sources of non-renewable energy to heat their homes and businesses, to switch to using renewable energy instead.

Non-renewable energy resources mean that once the energy resources have been depleted, there is no way of replacing them.

The four main types of non-renewable energy resources are:

  • Natural gas
  • Coal
  • Oil
  • Nuclear energy

Conversely, renewable energy resources naturally replenish themselves and the four main types of renewable energy sources are:

  • Air-source heat pumps
  • Ground-source heat pumps
  • Biomass boilers
  • Solar water heating

Read more: Types of Home Heating Systems - which one is best?

What is RHI?

RHI is an abbreviation for the Renewable Heat Incentive scheme introduced by the government in April 2014 with a view to helping the UK government achieve their net zero emissions target by 2050.

It’s vitally important the UK government meets this proposed net-zero-carbon-emissions target by 2050 as they were the first major economy in the world to legally commit to doing so.

Sadly, the UK has a long way to go before it gets anywhere close to catching up with its ‘green’ European neighbour, the Netherlands. The BBC recently reported how the Netherlands are in the process of closing down their country’s largest gas field and are hopeful of meeting its ambitious target of “getting every house off fossil fuels by 2050”.

In addition to the global warming crisis and rising costs in fossil fuels - leading to many UK energy companies going bust and thousands of households struggling with utility bills - it’s hoped the RHI scheme will gain popularity before the window for applications closes in March next year.

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RHI payments

Under the RHI scheme, households who convert their heating systems to renewable resources will receive quarterly payments for seven years, to help offset or potentially completely refund the cost of installing a renewable heating system.

Or, if you already have renewable energy heating installed, the government will instead help households by providing ‘renewable technology’.

According to a table of estimated RHI costs and earnings by Which?, the payments you could potentially receive for installing a heat pump heating system far exceed payments you could expect to receive for installing and using a biomass boiler or solar thermal panels.

However, the estimated payments are not as lucrative for smaller [1-bed] properties potentially making the scheme less attractive or financially viable to those with smaller homes.

Note: In September 2017, heat demand limits were introduced meaning Ofgem’s payments are based on a property’s annual heat demand, as shown on their home’s Energy Performance Certificate (EPC), or the heat demand limit (whichever one is the lowest).

You can view your property’s EPC online, for free, via the gov.uk’s website.

You might be interested in: The cheapest way to heat a house

What is a heat pump?

  • A heat pump is a renewable source of heating.
  • There are two types of heat pumps: air-source heat pumps and ground-source heat pumps.
  • An air source heat pump extracts air from outside a home and converts that air into heat energy, which is then used to heat your home and water.
  • A ground-source heat pump (yes, you guessed it) absorbs heat energy from the ground to heat your home and water.

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RHI grants

The uk gov website states that to be eligible for a domestic RHI grant you need to either own your home or be a social or private landlord and that new build properties are not normally eligible unless you’re doing a self-build.

If you wish to install an air source heat pump under the scheme, you will need to have an electricity meter fitted.

You can apply for a domestic renewable heat incentive UK via Ofgem’s website. You have until midnight on 31st March 2022 to apply.

To potentially receive a larger upfront payment towards your new heating installation costs, you may be able to register for a Metering and Monitoring Service Package (MMSP), although there are limited packages available. You can find out more about this optional monitoring and how to apply on Ofgem’s website.

Note: If you received a Green Homes Grant, you must notify Ofgem of this when you apply for a domestic RHI; the Green Homes Grant payment will then be deducted from your RIH payments. Applications for the Green Homes Grant scheme are now closed.

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