The Renewable Heat Incentive explained

warm mug of tea

If you’re looking for renewable ways to heat your home and pay less for energy, the Renewable Heat Incentive might be up your chimney. Read on for more information on the RHI.

What is the Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is a financial incentive backed by the government to promote and sustain the use of renewable heat in UK homes. It was launched in 2014 to help the UK reach its target of producing at least 12% of its heat from renewable sources by the year 2020. The Renewable Heat Incentive scheme was also set up to help reduce the UK’s carbon emissions.

How does the scheme work?

The RHI is one of many green energy incentives in the UK. By installing renewable technology or devices, you could receive quarterly cash payments over seven years. There are two types of Renewable Heat Incentive schemes in Great Britain. Domestic RHI for homes served by one heating system and non-domestic RHI for properties that share a heating system.

What technologies support RHI?

Technologies supported by the Renewable Heat Incentive include air & ground source heat pumps, biomass boilers and solar water heating. 

An air-source heat pump works by taking air from the outdoors and heating it to a higher temperature which in turn, heats your home. The heat pump runs on electricity but significantly less than the heat it generates.

Ground-source heat pumps work by absorbing the naturally occurring heat that’s stored in the ground in the form of water and the addition of anti-freeze. Together, they are compressed and sent through a heat exchanger, extracting the heat produced and transferred to your home’s heating system via a heat pump.

Biomass boilers burn biological matter such as wood, waste from food crops and processing, to generate heat used to heat homes. A biomass boiler consists of a combustion chamber where all the burning takes place and a flue where the hot gas and air produced travels to a heat exchanger. From the exchanger, the heat is transferred into water and distributed to your home’s central heating system ready for use.  

Solar water heating works by pumping water from the mains to the solar panels installed on the roof of your property. From here, the sun heats the water, which is then stored in a hot water cylinder, where a boiler has access to it to top up the boiling water.  

Who can apply for RHI?

Renewable Heat Incentive applications are accepted within a year of installation (of the applicable technologies) from the following:

  • Social Housing providers such as housing associations, trusts and local councils with eligible technology installed
  • Private and live-in landlords
  • Self-builders and property developers
  • Owners of single domestic dwellings.

What is the difference between RHI and the Feed-in Tariff?

The main difference between the Feed-in Tariff (FIT) and the RHI scheme is that you with a FIT, you’re paid for the amount of renewable energy you generate. Under the RHI, you’re given payments to help cushion the financial burden of installing renewable energy technology. Where RHI schemes are mainly based around generating heat for renewable heating systems, the FIT involves the generation of electricity.  

Is RHI worth it? How much could I earn?

According to Which?, RHI payments for a biomass boiler over seven years could range anywhere between £4,000 for a one-bedroom semi-detached home to £9,000+ for a three-bedroom property. It’s worth bearing in mind here that initial installation costs for a boiler of this kind could be between £9,000 to £20,000 depending on the size of your home.

You’ll probably find that you get better value for your efforts if your home is off the gas grid. That’s not to say that being “on the grid” isn’t worth it, however. The difference in value is because homes and properties that are off the grid are usually more costly to heat.  With the installation of a renewable heating system, the savings you could make could be huge. 

How to apply for the Renewable Heating Incentive.

You can apply for the Renewable Heating Incentive with Ofgem. Before starting your application you should have to hand your Energy Performance Certificate (EPC) and Microgeneration Certification Scheme (MCS) documents. You’ll also need your metering for performance (for heat pumps only), metering for payments (heat pumps and biomass plants) credentials along with your bank details.  

Switching to renewable energy

To get the best deals, you need to switch energy providers. Use our technology to compare energy or compare electricity deals and see how much you could save on your next energy bill. 

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