How Does the New Renewable Heat Incentive Work?

by | Jul 24, 2014 | News

03Since the 9th of April, UK householders have been able to claim payments to reduce the cost of switching to renewable energy. The Renewable Heat Incentive, aimed at increasing domestic renewable energy usage, launched earlier this month.

The scheme, which replaces programmes like the Low Carbon Buildings Programme and Renewable Heat Premium Payment, allows homeowners to receive payments in exchange for installing low carbon renewable heating systems.

Under the scheme, homeowners, landlords, and home builders are eligible for long-term payments to offset the cost of switching to renewable heating technology. The programme is primarily aimed at households that currently use oil and electricity to power their heating systems.


How many heating systems are allowed on each property?

Under the Renewable Heat Incentive, householders are eligible to receive payments for one heating system per property. Four technologies are covered under the new programme, including:

  • Biomass heating systems
  • Air to water heat pumps
  • Ground source heat pumps
  • Solar thermal panels

Although only one space heating system is covered per property, homeowners can file applications for space heating systems and separate solar thermal water heating systems.


Which households are eligible for the scheme?

The Renewable Heat Incentive currently covers households in England, Wales and Scotland. Northern Ireland has an independent RHI programme, which also offers compensation for homeowners that invest in renewable heating systems.

Payments are made to homeowners on a quarterly basis over seven years. The goal of the scheme is to make renewable heating systems more affordable and encourage homeowners to switch from fossil fuel heating to renewable energy sources.

Homeowners can qualify for the scheme by installing biomass heating systems, air or ground source heat pumps, or solar thermal panels in their homes. In order for households to qualify, they must undergo a green deal assessment.


Why should homeowners switch to renewable energy?

For years, the huge upfront costs of switching to renewable energy have made the technology unaffordable for homeowners. The goal of the RHI is to make greener, cleaner heating technology less expensive and inaccessible for homeowners.

YouGen operator Cathy Debenham, notes that the Renewable Heat Incentive makes the price difference between fossil fuel heating systems and renewable energy less of a barrier for homeowners.

Debenham says: “Its aim is to enable renewable heating systems to compete on a level playing field with fossil fuel ones. The payments, which are made over seven years compensate the owner for the price difference between the two, including the cost of borrowing money to pay for the installation.”

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