Renewable Heat Incentive – Domestic RHI – paid over 7 years
Owners of ground source heat pumps systems (and other eligible renewable heat technologies) installed in domestic properties will be able to apply for RHI – a financial incentive receivable over seven years. There is no need to delay installations for owners of domestic properties, because the RHI will apply for all ground source heat pumps installed since 15 July 2009.
DECC published its Domestic RHI Policy on 12 July 2013. RHI for domestic buildings is expected to apply from spring 2014. Renewable heat installations are due to receive a cashback subsidy of around 19 pence per kilowatt hour used – for the first seven years of the equipment used.
The RHI tariff table below shows the technologies that will be eligible for domestic RHI and the tariffs for each technology. The RHI provides a major incentive for owners to invest in ground source heat pumps and solar thermal renewable heat technologies. The tariffs are based on pence/kWh of renewable heat delivered. The rates vary with the technology used as follows:
|Renewable Heat Incentive
|Ground source heat pumps||18.8||7|
|Air source heat pumps¹||7.3¹||7|
¹ RHI for ashp is subject to ashp achieving a CoP > 2.5.
To receive RHI for a domestic building, each system must be installed by an MCS certified installer.
Each domestic building must show an Energy Performance Certificate to evidence its deemed energy use.
Each domestic building must undergo a Green Deal Assessment.
Deeming of heat used for Domestic RHI
Although metering of heat used is required for RHI payments for Non-Domestic buildings, for the Domestic RHI metering is seen as uneconomic and inappropriate: there is a danger that additional heat generated and wasted would increase RHI payments. Instead DECC plans for Ofgem to pay RHI on the basis of the deemed heat used by a property, as evidenced by an Energy Performance Certificate done as part of an Green Deal Assessment required to qualify for Domestic RHI.
However, second properties and those with fossil fuel heating alternatives will have to install meters and be paid on heat generated (up to the limit for deemed heating).
Renewable Heat Premium Payment – RHPP – £2,300
There is a further single payment grant of £1,250 called the RHPP which is only available to owners of domestic properties who are not currently using mains gas for heating. They can register with the Energy Savings Trust and receive £1,250 if they have a ground source heat pump installed and commissioned by 31 March 2014.
For applications received from 20 May 2013 the RHPP payment for ground source heat pumps is increased to £2,300. However, part of this increase will be needed towards the cost of a Green Deal Assessment which will now be required before an application is submitted.
RHI Tax free index linked income for 7 years
RHI tariffs are exempt from income tax. This means that domestic users and other income tax payers will not be taxed on any income received from the Feed-In Tariffs or the Renewable Heat Incentive. RHI payments are also index linked – they are adjusted for inflation on 1 April each year.
A ground source heat pump provides an excellent method for providing emission free heating and avoiding further rises in energy bills, as well as attracting RHI, but they must be installed by an experienced contractor for the full potential to be realised.
Please verify if your contractor is a member of the GSHP Association.