Renewable Heat Incentive

The Renewable Heat Incentive (RHI) is a scheme formed by the UK Government, among other heat pump grants, to incentivize private households, communities, and businesses to adopt renewable energy technologies for heating, such as air source heat pumps in the UK, by providing financial assistance.

The RHI was first established in April 2014, and on the 22nd of May 2018, the latest regulations came into effect. RHI was set up to minimise the effects of climate change, as well as being the main driver towards the UK’s goal for 2020, which is to have 12% of heating coming from renewable energy sources.

There are two types of RHI schemes: domestic and non‑domestic Renewable Heat Incentive.

Only the following types of renewable heating systems are eligible for the domestic RHI scheme:

The domestic RHI works as a financial support program for households with renewable energy heating systems. With the help of the RHI, households can save a significant amount of money in the long run, if they have eligible heating systems like heat pumps installed in their home.

In order to be approved for the domestic RHI, it is very important to be aware of all the steps in the application process. There are various requirements at each step that applicants must be familiar with, relating to both the renewable energy technology installation and the home itself.

Quality time spent on investigating the right renewable heating solution and installer increases the chance of your RHI application being approved.

The domestic RHI payments are calculated taking into consideration three major factors:

The rate of RHI payments that you receive can change year by year. Since the Renewable Heat Incentive came into force, the scheme used a ‘degression’ system created to manage the budget for the domestic RHI.

However, on 1 December 2019, the Department for Business, Energy and Industrial Strategy (BEIS) announced that there will be no degression on 1 January 2020.

The table below illustrates the current and future Ofgem RHI tariffs for each of the eligible renewable heating systems.

* These tariffs were adjusted in line with Consumer Price Index (CPI)

Here is an example of how domestic RHI Payments can be calculated:

In case you do not want to make calculations yourself, use the RHI calculator to find out what payments you could receive from installing a renewable heating technology.

After thorough research of all the RHI scheme requirements, it is wise to consider all the pros and cons of heat pumps and other eligible renewable energy heating systems. It is important to pick the best renewable energy heating technology for your household that will not only serve as an energy source but also lead to significant savings on your energy bills. Therefore, it is advisable to consult with professionals before embarking on your home improvements project.

Together with the installation of your chosen renewable heating system, you might also have to install metering. There are two types of metering: metering for performance and metering for payment. Which type is required depends on your choice of heating system.

‘Metering for performance’ is an eligibility obligation for all new heat pumps. ‘Metering for payments’ is an eligibility requirement for heat pumps, biomass stoves, and boilers.

As a contrary, if you have assessed all the pros and cons of solar energy you opted to go for solar thermal system, you do not have to install metering. The reason being that for heating domestic water, solar thermal is not obligated to be metered.

Lastly, you should spend some time choosing the right renewable energy heating technology installer. Alongside that, make sure that your heating system installer has a Microgeneration Certification Scheme (MCS) certificate.

In order to apply for the domestic RHI, you have to live in England, Scotland or Wales. Thereafter, to apply for the domestic RHI, you have to own a home, be either private or social landlord, or build a new property yourself, meeting all the necessary requirements.

When it comes to the required documents you will need a Microgeneration Certification Scheme (MCS) installation certificate number, which you should receive after the MCS certified installer completes the installation of your renewable heating system.

Thereafter, the Green Deal Assessment for your building will have to be carried out. This assessment is made up of two documents:

Additionally, you have to be ready to give your bank details and the amount you have paid for the installation of your renewable heating system. If you have received payments from public funds before, you should put it on notice, including the amount you got and when you were paid.

From the day you apply to the domestic RHI you automatically consent to all the ongoing obligations that go with the scheme. One of your responsibilities is complying with the ongoing obligations related to your household and the specific renewable energy heating system that you have installed.

Year after year, you have to fill out an annual declaration. By completing the declaration, you ensure that you comply with all the scheme rules so that the right amount of money is paid for the heat that you generate.

These are some of the annual declarations you will have to submit:

On top of that, Ofgem carry out audit checks to make sure that every domestic RHI participant follows the scheme rules. Anyone who has applied to the domestic RHI can be chosen for the audit check at any time. Audit checks for renewable heating technologies are selected based on multiple reasons, as well as random sampling.