There are some things in life that seem too good to be true. Buy One Get One Free offers. All Inclusive Holidays. Upgrades to business class. Heating your home or business and being paid for it.
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Hang on a minute – you can’t do that!
Actually, with the Renewable Heating Incentive that’s exactly what you do! You heat your home (by renewable means) and the Government will pay you to do so. It’s an incentive that many people are taking advantage of.
So is it a bit like the Solar Feed-in Tariff?
In a way it is, yes. If you install solar panels to generate electricity you get paid for what you generate and also what you are deemed to have exported to the National Grid, usually assumed to be half of what you generate.
So how does it differ?
The Renewable Heating Incentive is based on the amount of heat your system generates. Usually this will be estimated (“deemed”) by ofgem when you apply for the tariff, although some systems will be metered to determine the amount precisely. Domestic installations will then receive payments of that amount quarterly for the next seven years, subject to an annual review of the per unit rate. Business installations receive payments for 20 years.
What technologies are covered?
The four main types of renewable heating eligible for the scheme are:
- Air source heat pumps
- Biomass boilers
- Ground source heat pumps
- Solar thermal systems
Additionally, businesses can install biogas/biomethane systems, deep geothermal systems and Combined Heat and Power (CHP) systems.
What on Earth does all that mean?
Heat pumps, whether air or ground source simply move energy from where it’s not needed to where it is. They’re a bit like refrigerators – except you want them to warm you up.
Biomass boilers simply burn renewable fuels such as pelleted wood or woody grasses that can be grown quickly. They transfer the heat to the heating system in the same way as a traditional gas boiler.
Solar thermal systems use panels on the roof to warm water or refrigerant that can then be used to heat radiators or as hot water.
So how does that save me money?
The payments you receive offset the amount you pay for fuel and maintenance on your system. Carefully choosing your supplier and type of installation will allow you to maximise the benefits of the Renewable Heating Incentive. If you are considering replacing a heating system to be eligible for the RHI your first port of call should be talking to an experienced renewable heating systems company who can advise you on your options and the likely return you will make on your investment.
But I have to have the cash upfront to replace my boiler?
Yes (or be able to borrow it), but sooner or later you’d need to do that anyway. Plus a new heating system could be vastly more efficient than your existing one, which in itself could save you money on your heating bills. Biomass boilers will require a fuel supply but other systems use the sun’s heat, ground heat or even manage to extract heat from thin air!
How come I’ve never heard about it before?
Although the Renewable Heating Incentive has been around for several years (since 2011) it is a world-first. The UK are leading the field in encouraging a switch to renewable forms of heating, but whilst electricity generation can be “added on” to any home or business, heating systems are usually only replaced when they reach the end of their life. So it’s taking longer to roll out. However, now you know something about it, you’re sure to be able to consider whether it’s likely to work for you.
