The Domestic Renewable Heat Incentive, or Domestic RHI, is a financial incentive set up by the government to encourage homeowners to use renewable heat and reduce their carbon emissions. Since it was established in 2014, it’s benefitted 1,000s of customers.
Those who make the most of the scheme and adhere to the guidelines receive quarterly payments for seven years, based off their energy performance certificate and COP/SPF (efficiency) of the heat pump. But applications for the scheme close in March 2022, so customers looking to take advantage need to apply sooner rather than later. So, what is the RHI scheme and why should customers apply?
The benefits of the RHI scheme
There are several benefits for property owners who invest in the RHI scheme. Firstly, there is an earning potential that can cover the entire cost of installing a renewable heating system. The amount you can earn depends on the specifics of your property, the type of system you have, and the amount of heat your property requires.
Over the course of the seven years, your RHI payments should provide you with most or even all of your initial investment.
Depending on the system you are replacing, a more efficient, renewable system should also deliver lower running costs adding further savings and deliver an even better financial investment. Furthermore, using renewable energy to heat your property reduces your carbon footprint which is better for the planet.
How does the RHI scheme work?
The RHI scheme provides payments for the use of certain renewable energy technologies in residential properties. The financial support is intended to offset the costs of electricity compared to gas and the scheme was created to encourage people to make the switch and help the UK meet its renewable energy targets and cut carbon emissions. Initially people were reluctant to use new and emerging renewable technologies due to an uncertainty about their performance. However, with the financial support from the RHI scheme, more people are choosing renewable heat as their first choice for an efficient heating system for their home and to support an overall emissions reduction.
Who qualifies?
The Domestic RHI scheme can be used with a range of renewable heating systems, including:
- Biomass boilers
- Ground source heat pumps
- Air source heat pumps
- Solar thermal panels
- Water source heat pumps
The payments are paid out over 7 years. In order to qualify for the domestic tariff, the system needs to provide heat to a single dwelling. The commercial RHI tariff, for business premises or multiple dwellings came to an end in March 2021.
Domestic RHI payments take three main factors into consideration:
- The annual heating and hot water demand for the property
- The Seasonal Coefficient of Performance (SCOP) of the heating system
- Current RHI tariffs
There are limits to the amount of space heating you can receive payments for, which include:
- 20,000kWh for air source heat pumps
- 25,000kWh for biomass boilers and stoves
- 30,000kWh for ground source heat pumps
There’s no limit for solar water heating systems. With regard to heat pumps, if the heat demand is over the capped limit, you’ll receive the unit tariff multiplied by the amount of renewable heat contributing to the demand.
What is required to apply for RHI?
To apply for RHI, your renewable heating system needs to be:
- Listed as a Microgeneration Certification System (MCS) certified product
- Issued with an MCS certificate, which you’ll receive when your renewable heating system is fully installed
- Energy Performance Certificate (no older than 24 months)
You’ll need your MCS certificate number, your Energy Performance Certificate number and your bank details in order to apply. The deadline to apply for the Renewable Heat Incentive is 31 March 2022 and you need to apply within one year of the commissioning date of the system.
Final thoughts
Renewable energy systems are better for the environment and your finances, and with the savings from RHI, you could earn back the money spent on the installation costs too. With the deadline to apply approaching fast, there’s never been a better time to invest in a renewable energy system to heat your property and make savings in the process.
Geo Green Power are specialists in the installation of renewable energy systems, and we’re well equipped to help you choose a heating system that meets your needs. Contact us today to find out more.
