Incentives
Renewable heat incentive (RHI)
To encourage the take up of renewable heating the Government has introduced the Renewable Heat Incentive (RHI), administered by Ofgem.
Eligible technologies
Air Source Heat pumps
Ground Source Heat pumps
Water Source Heat pumps
Biomass boilers (Pier do not provide these for domestic customers)
Solar thermal water heating
How does it work?
For the Domestic Renewable Heat incentive (RHI) you’ll receive quarterly payments for seven years. Those without mains gas have the most potential to save on fuel bills and carbon emissions.
Quarterly, index-linked payments are made based upon the amount of renewable energy required by your home based on your energy performance certificate. Depending on take up scheme tariffs can change and Ofgem release tariff tables at least once a year. However, once you’re in your in and the rate is set at the time of your acceptance.
EPC requirements and who can claim
The renewable heating system has to be in a property that is capable of getting a domestic Energy Performance (EPC). Without one, you won’t be able to apply.
The EPC must not include any recommendation for cavity wall insulation or loft insulation.
If it does then these actions need to be addressed prior to the installation and another EPC obtained to demonstrate that they have been cleared (with the exception of listed buildings).
Payments and caps
You will be paid for each kWh of renewable heat that the heat pump generates based on the figure on your EPC, taking into account the amount of electricity consumed to produce the units of renewable energy, known as the Seasonal Coefficient of Performance (SCOP).
The total kWh on the EPC is capped
Current capped annual energy demands (kWh)
Ground-source heat pumps: 30,000kWh
Air-source heat pumps: 20,000kWh
Extra income
Some installations require the system to be metered if the installation is not supplying 100% of the heat demand (called a bivalent system). For an average size property installing an air-source heat pump, this would mean that you would receive around £10,000 over 7 years, or for a ground source heat pump around £20,000.
Therefore retrofitting a Ground Source Heat Pump or Air-source heat pump to your property can provide additional income as well as meeting your heating and hot water needs and drastically reducing your energy bill. Some properties, particularly those not on the gas mains could see a payback of the original investment in as little as 5 or 6 years if payment from the RHI payment is included.
