Renewable Heat Incentive Announced

The Department of Energy and Climate Change (DECC) has announced the domestic Renewable Heat Incentive (RHI) levels.

The tariff levels have been set at:

  • Solar thermal: 19.2p/kWh (minimum)
  • Biomass boilers: 12.2p/kWh
  • Ground source heat pumps: 18.8p/kWh
  • Air source heat pumps: 7.3p/kWh

DECC said that the solar thermal tariff would be a minimum of 19.2p but could be higher depending on the outcome of an assessment of the marginal cost of renewable energy. A final announcement on this will be made in the autumn.

Commenting on the launch of the domestic arm of the RHI, energy and climate change minister Greg Barker said: “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.”

The domestic RHI will available to anyone who installed renewable heat technology and meets the RHI eligibility criteria from 15 July 2009.

In a move trailed by the recent revised RHPP payments, those seeking to claim RHI will need to complete a Green Deal assessment before applying. DECC states that applicants will be required to have met minimum loft (250mm) and cavity wall insulation requirements where appropriate.

The tariff will be paid on a quarterly basis for seven years and will be based on the estimated heat demand of the property in most cases. DECC is offering an additional £230 per year for consumers who take out metering and monitoring support packages for heat pumps and £200 for biomass boilers.

Mike Landy, head of on-site renewables at the Renewable Energy Association, said: “After several delays and stagnation in the market, today’s announcement will give a huge boost to the domestic renewable heat industry. Companies will now be able to tell homeowners exactly how much financial support they can earn through the use of renewable heating systems. Green heat can be very cost effective, particularly for households off the gas grid, and can make a major dent in the UK’s greenhouse gas emissions from heating, which account for roughly double those of electricity and nearly half the UK total.”

Stuart Elmes, chair of the STA solar thermal working group, welcomed the announcement too, he said: “This is a massive boost for the solar thermal market. The value of this incentive is on a whole new level, there’s nothing like it anywhere in the world.

“From now on people can install solar heating with confidence that their system will be able to join the RHI scheme, and knowing what their payments will be worth.”

“In fact there’s every reason to install now because a Renewable Heat Premium Payment (RHPP) grant of £600 is available in the run up to the launch. Although the value of this grant will be subtracted from the RHI payments, it will be taken over the course of the scheme, so householders installing between now and the start of the scheme will in effect be receiving their £600 early.”

Paul Barwell, chief executive of the STA, concluded: “This announcement today is a major success for the STA. Our team has worked very closely with DECC over an extended period in an effort to ensure that the benefits of solar thermal are adequately recognised in the domestic RHI. In particular we have helped to drive a deeming calculation based on true occupancy that better reflects hot water usage in the home. The exceptional technical expertise of Stuart Elmes has been invaluable to our efforts.”

“We recognise that there has been a high degree of skepticism in the industry following the difficult gestation of this scheme, but after four years it is time for the solar industry to really get behind this breakthrough for UK market prospects.”

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