What Was The Renewable Heat Incentive?

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Renewable Heat Incentive

The Renewable Heat Incentive was a government scheme aiming to incentivize the use of renewable energy, such as heat pumps, to use as a central heating system. The scheme is now closed to new applicants as of 31st March 2022, but it is still running for existing members, whilst the Boiler Upgrade Scheme (BUS) launching in May 2022 is effectively taking its place.

There are two variations of RHI, one for domestic use, and the other for non-domestic. Meanwhile, the scheme throughout North Ireland was rendered unavailable for new applications, but its services are still live for those already applied.

The mechanics of RHI

RHI gave out monetary support to those who were interested in switching to renewable energy technology for their household. It was a government-funded directive that aimed to cut carbon emissions and help the UK meet its renewable energy targets by offsetting the price of fitting and ongoing use of a new heating system. Applications went through the large energy regulator known as Ofgem. The scheme’s complete closure comes in 2029. Until then, payments will continue a scheduled.

The technologies available for KHI applicants were as follows:

  • Air Source Heat Pump Grant
  • Ground-source heat pumps
  • Biomass Boilers
  • Solar Heating

RHI Tariff Explanation

Participants would receive payment every quarter of the year for every kilowatt-hour. It was also possible to have several technologies installed and get paid for each system they used throughout the duration of the scheme.

The amount recipients are paid per kWh of heat depends on the renewable technology installed when they applied to get RHI and their home’s Energy Performance Certificate (EPC) rating. Original applicants that keep meeting their obligations will receive payments until the end of their membership, which runs for seven years.

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Renewable heat incentive scheme

How is the Renewable Heat Incentive different from the Boiler Upgrade Scheme?

RHI was a programme that incentivized the use of renewable energy by paying members of the scheme over seven years. You are paid £1750 four times a year. In comparison, the Boiler Upgrade Scheme (BUS) is a government initiative created in May 2022 that offered grants towards the installation of heat pumps and biomass boilers.

The prices are as follows:

Heat Pump GrantBiomass Boiler

The scheme is ongoing for three years.

Your successful application depends on your renewable heat appliance being installed on or after the 1st of April 2022. It’s recommended that you check whether your house is compatible with these types of boilers and if it’s energy efficient (well-insulated).

It is mandatory that all sign-ups will be done through the installer that you hire for the labour, meaning you have minimal administrative responsibilities. Your installer will download, fill in, and submit a form to Ofgem (the energy regulator).

Once Ofgem confirms they have the complete form, they will contact the homeowner to get a signature for their consent as a final step. After that, the installer will set a date to come and make the fitting.

What’s the difference between the Feed-in Tariff, Smart Export Guarantee, and RHI?

The Feed-in Tariff (FIT) made cash payments to households that produced and exported renewable electricity. RHI payments are supposed to offset the expenses of fitting and using a renewable heating system, instead of providing an income in return for the renewable electricity these homes put into the grid.

The schemes provided payments for different renewable technologies:

  • The RHI is for renewable heating systems, like heat pumps, biomass boilers, and solar water heating.
  • The FIT was for renewable electricity systems, including solar panels and wind turbines.

The FIT stopped taking new applications in 2019. The Smart Export Guarantee (SEG) was introduced to replace it. The SEG pays homeowners for the excess renewable electricity they produce and export to the national grid. However, unlike the FIT, the SEG won’t reward you for producing electricity that you don’t export. 

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Ollie Creevy
Ollie has been writing content online about home improvements for over 3 years. With a real interest and in-depth knowledge of heat pumps and ECO home improvement measures you can use to save on your energy bills. Ollie also keeps up to date with all the Government grants available for you to take advantage of like ECO4 and the Boiler Upgrade Scheme.