The domestic Renewable Heat Incentive (RHI) is the world’s first long-term financial support programme for renewable heat, offering homeowners payments to offset the cost of installing low carbon systems in their properties.
The scheme is open to everyone – home owners, social and private landlords, and people who build their own homes. It is available to households both on and off the gas grid.
Minister for Energy Greg Barker said: "This is the first scheme of its kind in the world – showing yet again that the UK is leading the way in the clean energy sector.
"Not only will people have warmer homes and cheaper fuel bills, they will reduce their carbon emissions, and will also get cash payments for installing these new technologies.
"It opens up a market for the supply chain, engineers and installers – generating growth and supporting jobs as part of our long-term economic plan."
The technologies currently covered by the scheme are:
Biomass heating systems, which burn fuel such as wood pellets, chips or logs to provide central heating and hot water in a home. Biomass-only boilers are designed to provide heating using a ‘wet system’ (eg through radiators) and provide hot water. Pellet stoves with integrated boilers are designed to burn only wood pellets and can heat the room they are in directly, as well as provide heat to the rest of the home using a ‘wet system’ (eg through radiators) and provide hot water.
Ground or water source heat pumps, which extract heat from the ground or water. This heat can then be used to provide heating and/or hot water in a home.
Air to water heat pumps, which absorb heat from the outside air. This heat can then be used to provide heating and/or hot water in a home.
Solar thermal panels, which collect heat from the sun and use it to heat up water which is stored in a hot water cylinder. The two types of panels that are eligible are evacuated tube panels and liquid-filled flat plate panels.
Only one space heating system is allowed per property but homeowners can apply for solar thermal for hot water and a space heating system.
The guaranteed payments are made quarterly over seven years for households in England, Wales and Scotland. (Northern Ireland has its own RHI scheme). The scheme is designed to bridge the gap between the cost of fossil fuel heat sources and renewable heat alternatives.
The Renewable Energy Association (REA) has already backed the scheme, and says its introduction could make 2014 a breakthrough year for renewable heating.
Mike Landy, head of on-site renewables at the REA, said: "Domestic RHI is set to be one of the highlights of the Government’s green agenda in 2014. It will mean that renewable home heating is not just environmentally sensible, but also financially attractive."
Leading heat pump manufacturer, Mitsubishi Electric has welcomed the announcement. “RHI has been planned so that it produces a long term and sustainable growth in the use of renewable technologies,” explains John Kellett, General Manager of the company’s Heating Systems.
“It also makes the case for heat pumps much stronger, especially against carbon-intensive and expensive technologies such as oil, LPG and direct electric.
“We know air source heat pumps are one of the most straightforward renewable technologies to install and that they will provide a constant, comfortable level of heat to a building whilst lowering running costs and reducing carbon emissions,” adds Kellett.
“What we have done with the Ecodan range is ensure that it can be fitted to just about any house that has been thermally upgraded so almost any home could now benefit from RHI.”
Ecodan systems are increasingly being used in thousands of homes across the country from new build to solid brick Victorian buildings that have renovated.
Andy Deacon, Director of Development at the Energy Saving Trust, adds: “The domestic Renewable Heat Incentive (RHI) makes renewable heat technologies more cost-effective in off-gas properties – around six per cent of all UK homes – which are often heated by more expensive fuels. With rising energy bills and worries about energy security, there needs to be a major transformation in the way we heat our homes, with the domestic RHI helping to make this a reality through enabling households to receive an income for renewable energy generation, while also achieving financial and carbon savings."
The government-backed domestic Renewable Heat Incentive (RHI), which comes into force later this month, is set to spark a higher demand for wood pellets in the UK as homeowners are paid for the renewable heat that they generate for the very first time.
Richard Smith, Chairman of the UK Pellet Council, explains: “Wood pellets have become increasingly popular, predominantly in rural areas, thanks to their widespread availability for homeowners coupled with their low cost of purchase and high efficiency.
"For those who have typically used conventional fossil fuel sources up and until now, we expect the introduction of the RHI to result in a
positive shift in the number of consumers turning to wood pellets to heat their homes as they embrace this new financial incentive."
Photo: Kingston Heights is a £70m scheme situated near the banks of the River Thames that features the world’s first open water heat pump system for this type of mixed-use development, utilising Mitsubishi's Ecodan technology.
