The UK Government has confirmed the introduction of a Renewable Heat Incentive (RHI) within the year 2011/12 as part of their Comprehensive Spending Review, after closure in May 2010 of the Low Carbon Building Programme. RHI tariff payments for householders will start together with the Green Deal from 2012 to allow a more whole-house approach to heat production and energy saving. In the meantime, up to 25,000 installations from July will be supported by an RHI Premium Payment to cover the purchase price of green heating systems. Those taking up the Premium will then be eligible for a RHI tariff from October next year when the Green Deal begins, plus else who has had eligible equipment installed from July 2009.
For new build homes, an RHI tariff will be considered for the 2012 phase. The RHI Premium Payment will be worth around £15m and will ensure there is a fair spread of technologies across all regions of UK. The installed technologies will be monitored to enable government, manufacturers, installers and consumers to better understand how to make sure householders get the most out of them. There will be eligibility criteria in order to qualify for a Premium payment, including: a well insulated home based on its energy performance certificate, agreeing to give feedback on how the equipment performs.
For the commercial sector the renewable heat sector is forecast to have grown to include around 13,000 installations in industry; 110,000 installations in the commercial and public sector, supplying 25% of the heat demand in these sectors. All commercial, industry and public organisations plant will be eligible under the RHI to install technologies like biomass boilers, heat pumps and solar thermal. Community projects will also be eligible, provided a single installation is providing heat to more than one house. The tariffs will be paid for 20 years to eligible technologies that have installed since 15th July 2009 with payments being made for each kWh of renewable heat which is produced. Once in the scheme the level of support an installation will receive is fixed and adjusted annually with inflation. The Renewable Heat Incentive is designed to provide financial support that encourages individuals, communities and businesses to switch from using fossil fuel for heating, to renewables such as wood fuel. The incentive can be applied if the user replaces an existing fossil fuel heating system (e.g. gas, oil or coal) with a renewable technology (e.g. wood fuel) and pays a set amount each year as an incentive to reduce CO2 emissions and help prevent climate change.
The Government is not proposing to measure the heat generated from installations. Instead, an estimated figure will be used to work out payments. The estimated figure represents the amount of heat energy needed to warm the home and/or hot water and will vary by house age and size, as well as by technology. It has been proposed that payments would be made annually to householders. Eligible technologies will be:
- Air, water and ground-source heat pumps
- Solar thermal
- Biomass boilers
- Renewable combined heat and power
- Use of biogas and bio-liquids
- Injection of bio-methane into the natural gas grid