Kensa Engineering Supports the Renewable Heating Incentive (RHI) Scheme
Earlier this month, the Government produced a consultation document on the proposed Renewable Heat Incentive (RHI) scheme. This consultation sets out the Government’s proposals on the design and operation of the Renewable Heat Incentive, with the aim of providing financial support that encourages individuals, communities and businesses to switch from using fossil fuel for heating, to renewable technologies and sources.
The following are the key aspects of the RHI:
1. The scheme should support a range of technologies, including air, water and ground -source heat pumps (and other geothermal energy), solar thermal, biomass boilers, renewable combined heat and power, use of biogas and bioliquids and the injection of bi methane into the natural gas grid.
2. RHI payments to be claimed by, and paid to, the owner of the equipment. The RHI will be available to householders, local authorities and social landlords as well as the public, industrial and commercial sectors. All installations commissioned after 15th July 2009 will be seen as a “new installation” and will be eligible for the RHI.
3. In small and medium-sized installations, both installers and equipment to be certified under the Microgeneration Certification Scheme (MCS) or equivalent standard, helping to ensure quality assurance and consumer protection.
4. Payments will be paid over the life of the equipment (for Ground Source 23 years) and will be inflation linked and guaranteed; annually for installations below 45 kW and quarterly for those above this level; and always subject to conditions such as continuing to operate and maintain the equipment.
5. Tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems at all scales, with additional compensation for certain technologies for an element of the non-financial cost (e.g. the inconvenience of digging up a garden to install a ground-source heat pump).
6. Tariff levels are proposed to provide a rate of return of 12% on the additional capital cost of renewables, with a lower rate of return of 6% given to solar thermal.
Proposed tariff (p/kWh) Tariff for Ground source heat pumps.
Up to 45kW 7p/kWh for 23 years
45 to 350kW 5.5p/kWh for 20 years
350kW and above 1.5p/kWh for 20 years
Payments are to be calculated on the annual amount of heat output, expressed in kilowatt hours (kWh). At the small and medium scale, the amount of heat generated by the equipment is proposed to be estimated (or “deemed”) when installed in most cases. This will allow the beneficiary of the incentive to receive a set amount based on the deemed output, to encourage low energy consumption and discourage wasting heat.
The RHI will encourage renewable energy systems to be installed in buildings adopting a basic level of energy efficiency measures in a “whole-house approach”. A basic minimum level of energy efficiency required for existing homes would be:
• at least 125mm of loft insulation; and
• cavity wall filled where appropriate.
To incentivise households to implement these standards, the scheme proposes to introduce so-called “deemed” (rather than metered) compensation under the RHI. This would be done through an assessment using the Standard Assessment Procedure, (SAP) (or similar) used for energy rating of buildings to identify the appropriate deemed heat demand of the building based on the assumption that the minimum, energy efficiency measures will have been taken up alongside the renewable heat installation.
The renewable heat installation will be the sole fixed heating installation in the property (not counting any immersion heater that may form part of such installation). Current Grant schemes such as the Low Carbon Buildings Programme, CERT and CSEP will currently still be available and can be claimed as well as the RHI.
To find out more about the Renewable Heating Incentive, you can visit the website for the Department of Energy and Climate Change, by following this link.
To download the Kensa Engineering Factsheet which includes all of the above information and an example of the expected RHI returns, please click here.