Renewable Heat Incentive – Confirmed until March 2021

ICAX welcomes the Government confirmation of the continuity of the RHI until 31 March 2021.

The Government has also confirmed that domestic properties will be able to share a common ground array and receive Commercial RHI over 20 years on a deemed EPC basis for each property. This is a positive step from an engineering and efficiency prospective and should allow groups of houses to benefit from renewable heating and limit their carbon emissions for the benefit of society.

However, despite making positive statements about the need to decarbonise heating – and signing up to the Paris Agreement – the Government is planning to introduce limits on the amount of renewable heating above which Domestic RHI will not be paid:

  • the limit for ASHP installations will be 20kWh          – up to £1,337 a year for 7 years =  £9,498
  • the limit for biomass boilers will be 25kWh              – up to £1,620 a year for 7 years = £11,340
  • and the limit for GSHP installations will be 30kWh   – up to £4,206 a year for 7 years = £29,442

This new legislation, anticipated in autumn 2017, will limit the number of new installations in those domestic houses which currently emit the largest amount of CO2 (many of which are off the gas grid).

RHI Domestic tariffs

Renewable Heat Incentive
Domestic
RHI tariffs
pence/kWh
current rates
RHI tariffs
pence/kWh
from April 2017
RHI tariffs
pence/kWh
from July 2017
Tariff lifetime
in years
Ground source heat pumps 19.33 19.86 19.86 7
Air to water heat pumps 7.51 7.63 7.63 7
Solar thermal 19.74 20.06 20.06 7
Biomass 4.68 4.28 3.85 7

Tariffs increase with CPI each April.

RHI Commercial Biomass tariffs simplified

While most commercial RHI tariffs are unchanged, biomass tariffs are due to be simplified down to a single rate:

Renewable Heat Incentive
Commercial
RHI tariffs
pence/kWh
current rates
RHI tariffs
pence/kWh
from April 2017
RHI tariffs
pence/kWh
from July 2017
Tariff lifetime
in years
Ground source heat pumps 8.95 9.09 9.09 20
Air to water heat pumps 2.57 2.61 2.61 20
Solar thermal 10.28 10.44 10.44 20
Biomass 2.95 2.85 2.71 20

The rates shown for April 2017 are adjusted for inflation

The rates shown are reduced for run hours above 1,314 hours a year

See Biomass Degression

See RHI Tariff History

Is there Life after RHI?

It appears that the Government plans to move away from subsidy towards issuing instructions or prohibitions. From 2005 it has no longer been legal to install a gas boiler which was not a condensing boiler. Similar types of compulsion may be seen in future, possibly linked to planning permission. It is likely that such mandatory instructions will come into force well before the RHI for new installations ends on 31 March 2021.

Now is the time to invest in Ground Source Energy installations

The RHI will continue to be paid for installations completed and commissioned before 2021. After 31 March 2021 new installations are unlikely to receive any form of subsidy.

RHI contributes to realistic payback periods for renewable heat

For those installing ground source energy while the RHI is still available the RHI income will normally be larger than the annual running cost: this provides a significant contribution to the higher initial capital cost of ground source installations.

The tariff for GSHPs is now over three times the rate for biomass.

Take advantage of the opportunity to invest in ground source heating while the RHI budget lasts!

However, remember that it is critically important for a ground source installation to be well designed, well installed and well controlled for you to achieve the full financial reward.

 

See Ten reasons for the UK to use ground source energy to reduce carbon emissions.

 

See Ground Source Heating          See Ground Source Cooling          See Ground Source Energy