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Renewable Heat Incentive

Published Tuesday, May 3, 2016

Details of the scheme introduced to support renewable heat generation

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The aim of the Renewable Heat Incentive is to support households and businesses to generate renewable heat for their buildings. The first phase of the Renewable Heat Incentive, non-domestic RHI, was introduced in 2011. The domestic RHI was opened to applicants in 2014.

The Renewable Heat Incentive is similar to the Feed-In Tariffs, which incentivises smaller renewable electricity generation scheme but it is paid for by the Treasury, rather than through consumers’ energy bills. Ofgem has a dedicated RHI page setting out how the scheme works in detail and how to apply.

The Department of Energy and Climate Change (DECC) introduced new sustainability criteria for installations using biomass and biogas fuels, and producers of biomethane under the Renewable Heat Incentive (RHI) on 5 October 2015. To continue to receive RHI payments participants must now use fuels that meet the sustainability criteria.

The Government has recently confirmed funding for the scheme to 2020 and published a consultation on its review of the RHI, which is aimed maintain affordability and increasing the focus on technologies that are likely to be strategically important. It also proposes imposing a spending cap on the scheme. The Government the consultation Renewable Heat Incentive: A reformed and refocused scheme on 3 of March 2016, with a closure date of 27 April 2016.  It also published an Impact Assessment and some data on cost of installation for both non-domestic and domestic systems at the same time.

DECC publishes monthly statistics on RHI deployment together with a quarterly statistical release. The December 2015 release  as at 31 December 2015 13,580 non-domestic installations have been accredited with a combined capacity of 2.2 GW. There were also 45,111 accreditations for domestic RHI.

 

The Renewable Heat Incentive (RHI) has been put in place to mirror the support provided to renewable electricity suppliers by the Feed in Tariffs. As with the Feed-in Tariffs it will pay a certain amount per kWh generated for a fixed period of time, in this case 20 years, that will rise with inflation.

The RHI was originally intended to be funded by energy companies. However in October 2010 the Government announced that funding would be provided by the Treasury. The start of the scheme was originally postponed, but was up and running by November 2011 for non-domestic customers only. Domestic customers will be provided with some interim funding, and included from 2013.

The Government has also consulted on bringing in a cost control system for RHI to ensure that the scheme is not damaged by an unexpectedly high take up.

Commons Briefing papers SN06328

Author: Elena Ares

Topics: Climate change, Energy, Energy conservation, Renewable energy

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