DECC announces domestic RHI tariff levels

Published:  12 July, 2013

Householders could get paid hundreds of pounds a year for heat generated by solar thermal panels, biomass boilers and heat pumps, Energy & Climate Change Minister Greg Barker confirmed today.

Mr Barker announced the publication of the Department of Energy & Climate Change’s (DECC) policy document ‘Renewable Heat Incentive: the first step to transforming the way we heat our homes’, meeting the commitment to publish the framework for providing longer term financial support to households for the installation of renewable heating technologies in summer 2013.

The tariff levels have been set at 7.3p/kWh for air source heat pumps, 12.2p/kWh for biomass boilers, 18.8p/kWh for ground source heat pumps and at least 19.2 p/kWh for solar thermal.

The domestic Renewable Heat Incentive (RHI) for householders is designed to drive forward uptake of renewable heat technologies in homes across Great Britain to cut carbon, help meet renewables targets and save money on bills. The scheme is a world first, and has been up and running for the non-domestic sector since November 2011.

The announcement follows extensive consultation on how a financial incentive would work best for householders and takes into account lessons learned from the Renewable Heat Premium Payment grant scheme (RHPP) and the RHI non-domestic scheme.

Mr Barker said: “The Coalition is committed to helping hardworking families with the cost of living. Investing for the long-term in new renewable heat technologies will mean cleaner energy and cheaper bills, so this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.

“Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced. We are also sending a clear signal to industry that the Coalition is 110% committed to boosting and sustaining growth in this sector.”

He stressed that government remains committed to opening the scheme for applications in Spring 2014, saying: “This marks a major milestone in achieving our renewable heat goals; it builds on the successes of the RHPP, which has seen more than £20m spent on the installation of 16,000 plus domestic renewable heat systems over the last two years.”

Eligible applicants

The scheme will be made available to homeowners, private and social landlords, third-party owners of heating systems and people who build their own homes. Anyone who has installed a renewable heat technology since 15 July 2009 and meets the scheme eligibility criteria will be able to join the scheme.

Eligible technologies

RHI domestic will support air to water heat pumps, biomass-only boilers and biomass pellet stoves with back boilers, ground and water source heat pumps, flat plate and evacuated tube solar thermal panels.

Tariff payments

Payments will be made on a quarterly basis for seven years. The tariffs have been set at a level that reflects the expected cost of renewable heat generation over 20 years. In most cases, payments will be made based on estimated heat demand of the property. DECC will offer an extra set payment of £230 per year where consumers take out metering and monitoring support packages for heat pumps and £200 for biomass boilers.

Scheme requirements

Applicants 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 MCS certified (or certified by an equivalent scheme). MCS certified installers are currently required to be members of the Renewable Energy Consumer Code, which is backed by the Trading Standards Institute.

Covering the upfront costs of renewable heating kit

Householders may be able to get help with the upfront costs of the renewable heating kit under the government’s Green Deal. The Green Deal lets people pay for energy efficiency improvements, including renewable heating systems, through savings on their energy bills, and householders are able to take up Green Deal finance and claim the RHI payments. Money-off vouchers are also available under the RHPP scheme. Householders who receive money under RHPP will have this amount deducted from any future RHI payments to avoid a double subsidy.

The RHI for householders will be administered by Ofgem and more details on how to apply will be published in due course. Pre-application enquiries should be directed to the Energy Saving Advice Service on 0300 123 1234.

DECC is currently finalising the details of the expansion of the non-domestic RHI scheme and will confirm the way forward in the autumn alongside the outcome of the tariff review. DECC’s aim to introduce these changes from Spring 2014 remains unchanged.

Government has also published the response to the consultation on revisions to the Combined Heat and Power (CHP) Quality Assurance programme, which determines eligibility of this technology for support under the Renewables Obligation. The changes will apply to new CHP plants and will come into effect on 1 January 2014.

For more industry news, visit HVP's website.

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