THE RENEWABLE HEAT INCENTIVE
The Renewable Heat Incentive is a government scheme to encourage the uptake of renewable technologies by businesses, communities and householders through the provision of financial incentives. For example, domestic Air Source Heat Pumps (ASHP) will receive a tariff set at 10.18p per kW of renewable energy produced for 7 years.
The tariff is increased annually with inflation as determined by the CPI.
In practice this means that a typical domestic household will receive between £900 and £1400 per annum for 7 years which should meet most of the cost of installing the heat pump and cylinder.
This is how the RHI payments will be calculated:
The annual heat demand of the household will be determined by the EPC which must be no more than two years old. Here are the figures taken from a typical EPC:
In this example the total heat demand is 24667 kWh pa (21969 + 2698kWh) But let’s take an easy example and say it is 15,000kW. An Air Source Heat Pump can produce over 3kW of heat for every 1kW of energy it uses so at least two thirds of the energy is deemed to be renewable.
The RHI is therefore 10,000 (two thirds of 15,000) x 10.71p = £1071 x 7 years = £7497.
The precise proportion of the heat demand deemed to be renewable is determined by the efficiency of the system which in turn is determined by the design flow temperature – the lower the flow temperature the more efficient the system is deemed to be and the higher the RHI payments are.
However, please note that the maximum amount of heat loss allowable for calculating the domestic RHI is now capped at 20,000kW for air source heat pumps and at 30,000 for ground source heat pumps. This will affect larger and poorly insulated dwellings. It does not apply to commercial installations.
New World Energy
Each technology has a different tariff to reflect the varying installation costs and savings to householders. The tariff for solar thermal is 21.09p, the tariff for ground source heat pumps is 20.89p and biomass 6.88p.
Tariffs for commercial applications are spread over 20 years and the eligible system has to be metered. The rate for commercial ASHP is 2.75p
For further information go to: http://www.energysavingtrust.org.uk