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Reduce Energy Costs - Renewable Heat Incentive (RHI)

16th November 2011 - The Renewable Heat Incentive figures have now been confirmed!
The UK Government has committed that 15% of all energy consumed will come from renewable by 2020. To encourage the uptake of renewable heat systems such as Biomass they have introduced the Renewable Heat Incentive (RHI).

Scheme Details - The scheme will be introduced in two phases.

In the first phase, long-term tariff support will be targeted in the non-domestic sectors, at the big heat users - the industrial, business and public sector. Under this phase there will also be support of around £15 million for households through the Renewable Heat Premium Payment.

The second phase of the RHI scheme will see households moved to the same form of long-term tariff support offered to the non-domestic sector in the first phase. This transition will be timed to align with the Green Deal which is intended to be introduced in October 2012.

Details

1. Introduction date: July 2011
2. Expected Return on Capital Investment: 12-40%
3. Payments will be paid quarterly
4. Payments will be paid for 20 years after first payment (clarification is being sought)
5. Payments will be index linked (The above rates will already rise by 4.8% during the first year)
   

Tariff levels to be paid for non-domestic installations:

Size of biomass boiler	Tier 1 Tariff*	Tier 2 Tariff*
Boiler power up to 200kW	7.9p/kWh	2p/kWh
Boiler power 200kW to 1,000kW	4.9p/kWh	2p/kWh
Boiler power Over 1000 kW	1p/kWh	As per Tier 1

 *The Tier 1 rate will be paid for heat produced up to 15% of the boiler's nominal annual capacity (e.g. Tier 1 for a 150kW boiler is 150kW x 8760 hours/annum x 15% = 197,000kWh). Tier 2 rate is paid on heat produced above this rate. There is a single Tier rate for biomass systems over 1,000kW

We can provide advice and illustrations of exactly what benefit you can obtain from your particular heating system plans.

Eligibility

1. Only installations for non-domestic buildings are eligible.
2. The system must have been commissioned after 15th July 2009 and the client must not have received any capital grant.
3. Only boilers 'specifically designed and installed to burn biomass' will be supported.
4. The heat produced by the Biomass boiler must be metered and must be distinguishable from heat produced by any peak load fossil fuel boiler.
5. Heat meters will require annual recalibration.
6. The biomass boiler will need to be serviced according to the manufacturer's recommendations.
   

Application process

1. Applications must be made by the owner and not by an agent.
2. Rural Energy can offer a service to provide clients with all the relevant data and drawings required for the application.
3. The details are unclear at the moment but we believe that the approval process will probably be:
   a. A preliminary application will be made to OFGEM to approve the installation eligibility.
   b. The contractor can be appointed at this point to undertake/complete the installation.
   c. Make first claim to OFGEM with supporting documents. 

Note: for existing installations the client would be advised to go through step 1 to ensure that the installation meets all OFGEM criteria.