09.04.14
Domestic Renewable Heat Incentive goes live
People will now be offered cash payments to offset the cost of installing low carbon systems in their properties as the government’s domestic Renewable Heat Incentive (d-RHI) scheme is finally being rolled out.
Delayed since 2012, the d-RHI covers single domestic dwellings and is open to homeowners, private landlords, social landlords and self-builders. However, it will not be open to new build properties other than self-build.
The launch of the scheme follows extensive consultation on how a financial incentive would work best for householders and landlords.
Government set out the policy framework for introducing longer term support for domestic renewable heating in ‘Renewable Heat Incentive: the first step to transforming the way we heat our homes’ in July 2013. However, at that time, it still needed to finalise when legacy applicants would be able to apply for the scheme, the details of how it would manage the d-RHI budget, treatment of some types of subsidy and confirmation of the solar thermal tariff.
These issues were addressed in the ‘Further details of the domestic Renewable Heat Incentive’ paper, which confirms that degression tests will take place quarterly and that announcements will be made one month before any degression will take effect.
According to the DECC, triggers and super triggers will be set out for each tariff in the scheme in Regulations. Therefore, if a trigger is hit a 10% reduction of that tariff will take place. If deployment of any technology is significantly higher and a super trigger is hit, a 20% reduction could take effect. The reduced tariffs will only apply to new applicants; those already accredited onto the RHI will continue to receive the tariff in place at the time they were accredited. Additionally, it has been confirmed that the solar thermal tariff will be 19.2p/kWh of renewable heat.
However, the DECC has decided that where an installation was not at least in part paid for by the owner, even where the installation was funded from a private source, that installation will not be eligible for the d-RHI.
Technologies currently covered by the scheme include biomass heating systems, ground or water source heat pumps and solar thermal panels. And 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 government added that the “guaranteed payments” are made quarterly over seven years for households in England, Wales and Scotland.
Designed to bridge the gap between the cost of fossil fuel heat sources and renewable heat alternatives, 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.”
The Renewable Energy Association (REA) has already backed the scheme, and says its introduction could make 2014 a breakthrough year for renewable heating.
Dr Nina Skorupska, REA chief executive, said: “DECC, Ofgem and industry have been working for years on the d-RHI, and its launch today is a major milestone for the government’s green policy record.
“Households off the gas grid now have a financially attractive clean energy alternative to oil and electric heating. Already over half a million people have installed solar power in their homes to cut their costs and carbon emissions. Now millions more can do the same with solar hot water, wood fuel heating and heat pumps.”
John Kellett, general manager of Mitsubishi Heating Systems said t incentive scheme will see householders receive a payment of 7.3p for every kWh of renewable heat they use in their home, if generated by an air source heat pump. He said: “RHI has been planned so that it produces a long term and sustainable growth in the use of renewable technologies. It also makes the case for heat pumps much stronger, especially against carbon-intensive and expensive technologies such as oil, LPG and direct electric.”
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