Renewable Heat Incentive – Confirmed until March 2021

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

Investment in low carbon technologies, like heat pumps, is a private investment for a public benefit. Until the Treasury accepts this and acknowledges that public money is needed to encourage the public benefit of lower carbon emissions very few heat pumps will be installed, the skills shortage will remain and the supply chain will be underdeveloped.

The Government has not yet announced how it intends to encourage the use of low carbon heating technologies after 31 March 2021.

The Climate Change Committee has recommended that, "The 29 million existing homes across the UK must be made low-carbon, low-energy and resilient to a changing climate. This is a UK infrastructure priority and should be supported by HM Treasury. Homes should use low-carbon sources of heating such as heat pumps and heat networks".

RHI Domestic tariffs

Renewable Heat Incentive
Domestic
RHI tariffs
pence/kWh
from April 2017
RHI tariffs
pence/kWh
from April 2018
RHI tariffs
pence/kWh
from April 2019
Tariff lifetime
in years
Ground source heat pumps 19.86 20.46 20.87 7
Air to water heat pumps 10.18 10.49 10.70 7
Solar thermal 20.06 20.66 21.08 7
Biomass 4.28 6.74 6.87 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
from April 2017
RHI tariffs
pence/kWh
from April 2018
RHI tariffs
pence/kWh
from April 2019
Tariff lifetime
in years
Ground source heat pumps 9.09 9.36 9.55 20
Air to water heat pumps 2.61 2.69 2.74 20
Solar thermal 10.44 10.75 10.97 20
Biomass 2.85 2.96 2.74 20

The rates shown for April 2018 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 may not 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