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Friday 11th April 2014

The Domestic Renewable Heat Incentive

The Domestic RHI is open for business as from the 9th April 2014

The Domestic Renewable Heat Incentive (Domestic RHI) is a government financial incentive to promote the use of renewable heat. Switching to heating systems that use naturally replenished energy can help the UK reduce its carbon emissions.

People who join the scheme and stick to its rules, receive quarterly payments for seven years for the amount of clean, green renewable heat their system produces.

The scheme's open to anyone who can meet the joining requirements. It’s for households both off and on the gas grid.

 People off mains gas have the most potential to save on fuel bills and reduce carbon emissions.

Key to joining is that the renewable heating system heats only a single property which is capable of getting a domestic Energy Performance Certificate (EPC). The EPC is the proof we need that your property is assessed as a domestic ‘dwelling’. Without one, you won’t be able to apply and can’t join the scheme.

 An EPC gives information about a property’s energy use, plus recommendations on how to reduce energy and save money. It’s required every time you buy, sell or rent a property. It’s included as part of a Green Deal Assessment, which is a requirement for most to join the Domestic RHI.

 What are the tariffs?

These set the rate for your Domestic Renewable Heat Incentive (Domestic RHI) payments. You'll receive payment for seven years based on the amount of clean, green renewable heat you make at your domestic property.

Tariff (per kilowatt hour renewable heat) 18.8p (Ground Source Heat Pump)

Will my tariff rate change once I’ve joined?

Once you've joined the Domestic RHI, you’ll stay on the same tariff rate.

The only change will be for annual adjustment, which brings your payments in line with the Retail Price Index. This is announced on 1 April each year.

Example

Because heat pumps run on electricity, not all of the heat output is counted as renewable. Therefore the portion that isn't is calculated by using the Seasonal Performance Factor (SPF). We multiply the tariff rate by the SPF by the estimated annual heat load (in kWh) taken from the EPC. Divide by four for a quarterly figure.

Estimated annual heat load (from EPC)        15,000kWh

SPF (from MCS Heat Emitter Guide)             3.2

GSHP tariff rate at start of scheme                18.8p/kWh

Estimated annual heat load (total heat demand x (1 – 1/SPF)

15,000kWh x (1 – 1/3.2) = 10312kWh

Annual Tariff Payment for 7 years = 10312*18.8 / 100 = £1938.66 per year

Total over 7 year period : £13570.59!

As usual with such schemes, it is essential that all the right procedures are followed, the right documentation provided in order to qualify.

Synergy will help you by using the best materials, adhering to the required methodology and providing you with the necessary test certificates etc.

Synergy Boreholes