Renewable Heat Incentive

What is the Renewable Heat Incentive (RHI)?

The Renewable Heat Incentive is a long-term incentive payment for the generation of renewable heat from renewable sources. The RHI is paid by Ofgem on the behalf of the government to the owners of biomass heating systems for every unit (kWh) of renewable heat they generate. The scheme is being introduced in two phases. The first phase, non-domestic or commercial tariff support, opened for applications on 28^th November 2011. It is proposed that Phase 2 will include more technologies and introduce support for domestic households.

Financial benefits

Businesses will be paid up to 8.3p per kWh for the renewable heat and hot water they generate. The government have estimated that most participating businesses can expect to generate enough income from the RHI to generate a return of 12% per annum enabling them to recoup the installation cost of their system in 7-9 years.RHI payments are paid according to the total amount of renewable heat generated for eligible purposes. They are:

Guaranteed for 20 years
Linked to the Retail Price Index to ensure long-term return

The RHI is determined according to the size of the boiler and the total amount of eligible renewable heat supplied per annum.

Eligible Technology	Tariff Name	Eligible Sizes	Tariff Rate (pence/kWh)		Tarif Duration (Years)	Support Calculation
Soild biomass; Municiple Solid Waste (inc CHP)	Small Biomass	Less than 200kWth	Tier 1	8.3	20	Metering Tier 1 applies annually up to the Tier Break.Tier 2 above the Tier Break.The Tier Break is installed capacity x 1,314 peak load hours, i.e: kWth x 1,314
			Tier 2	2.1
	Medium Biomass	200kWth and above; less than 100kWth	Tier 1	5.1
			Tier 2	2.1
	Large Biomass	1000kWth and above		1.0		Metering

Payments are calculated by multiplying the tariff rate by the heat output (kWh) of the system.

RHI Illustration
Technology	Solid biomass (wood pellet)
Boiler size	150kW
Tariff name	Small Biomass
Heat supplied per annum	225,000kWh
Tier one payment	Tier one eligible heat = 131,400kWh=150 x 1314= 197,000kWh x £0.083= £16,359.30
Tier two payment	Total heat - tier one eligible heat = 225,000kWh - 197,100kWh Tier two eligible heat = 27,900kWh = 27,900 x £0.021 = £585.90
Total RHI	Tier 1 + tier 2 = £16,359.30 + £585.90= £16,945.20

How do I claim RHI for my business?

Ecofirst will help you through every step of the application and qualification process. Applications for RHI opened on 28^th November 2011. In order to participate in the scheme and claim the RHI payments, you will need to submit an application for accreditation to Ofgem and meet specific eligibility criteria.

Eligibility criteria include:

Only installations providing heat to non-domestic premises are eligible for RHI in phase 1
The installation must be owned by you
The technology must be a eligible type and size eg Solid biomass
The system must be new at the time it is installed
The system must use a metered liquid or steam heat delivery system
The system must provide heat for an eligible use in a building eg space heating, heating water, process heating
The building is eligible eg defined as permanent or long-lasting and wholly enclosed.