The Domestic Renewable Heat Incentive Tariffs (finally) confirmed!

After much waiting and considerable government deliberation, the feed-in-tariffs for the Renewable Heat Incentive scheme has finally been announced. This means that generating energy using alternative renewable sources such as heat pumps and solar thermal will now get you money through a similar feed-in-tariff system to those already in place for wind and solar. The scheme launches next spring.

Greg Barker, Climate Change minister says, “Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get innovative renewable heating kit in our homes.”

“The uptake of microgeneration technologies under the Feed-In Tariffs scheme has shown that renewable technologies can move from niche to mass market in just a few years, and with the support of the domestic RHI, I hope that renewable heating technologies will see such success.”

You can take advantage of the scheme if you have had any of the technologies installed since 15 July 2009. Those applying will also need to carry out a Green Deal assessment; which assesses a property’s energy efficiency and recommends suitable energy saving measures, the Department of Energy and Climate Change (DECC) says. In order to claim the incentive, householders must also ensure that their home has a minimum 250mm of loft insulation and cavity wall insulation if appropriate.

The Renewable Heat Incentive Tariffs

The generation tariffs for each technology are as follows:

Solar thermal (evacuated tube and flate plate) – at least 19.2p/kWh*
Ground source heat pump – 18.8p/kWh
Biomass boilers and biomass pellet stoves with a back boiler – 12.2p/kWh
Air source heat pumps (air-to-water) – 7.3p/kWh

This means that for every kilowatt hour of energy you produce using your renewable system, you will get a payment as above. Of course, these technologies do have high installation costs, but there is assistance available to help with this. Until next march you can take advantage of the Renewable Heat Premium Payment, which has been running for some time now, where you can get a lump of money towards the costs of installation, dependent upon the technology in question:

Ground source heat pumps – £2,300
Biomass boiler – £2,000
Air source heat pumps – £1,300
Solar thermal – £600

You can also get a Green Deal loan to help pay for the cost of these measures, for which you will require a Green Deal Assessment (as mentioned a prerequisite of the incentive anyway). Most of these technologies, just like solar PV already, offer a great way to move yourself away from dependence on the grid, and cut your fuel bills. The payback really could be worth it, so think about booking an assessment and getting yourself ready for the scheme when it starts.

Likely Returns to expect from the Renewable Heat Incentive

In terms of returns Steve Munday, MD of SMC solar ltd said  “Running the numbers for an Air Source Heat Pump I can conclude that you will get around £8,000 back on a £9,000 investment (without considering fuel cost savings).Both these figures assume that a retro-fit to an existing radiator system does not require any upgrade. So the reality is that homeowners may need to budget a little extra for upgrading their radiator system. The amount of this will only become known after detailed room-by-room  heat loss assessment.

Like with the Feed-in-tariffs to incentivise solar panels, the grants will be rapidly reduced over the ensuing years deliberately to incentivise and reward early investors.This really is a ‘no-brainer’ for anyone with a moderately old oil boiler. Even owners of gas systems are eligible although the fuel cost benefit will not be so pronounced until gas prices rise, as they inevitably will. ‘The early bird will catch the worm”

So there you have, act quickly to ensure you benefit from these generous tariff payments! If you want to learn more about the renewable heat incentive please visit our dedicated page here.