Picture of MoneyThe Renewable Heat Incentive (RHI) scheme was introduced in November 2011 to assist the UK in reducing it’s carbon emissions and achieve the EU renewable energy targets by 2020.

The RHI supports heat generation from approved biomass wood boilers including wood chip boilers, wood pellet boilers and log boilers. The scheme will guarantee a payment per kWh of heat generated for a period of 20 years. These payments will increase by RPI each year. This will ensure that biomass installations will not only benefit from significantly reduced fuel bills (up to 70% fuel savings) but also receive generous government support payments, achieving capital pay back within as little as 3 years, with the on going benefit of the RHI and reduced fuel bills.

Key considerations:

Single dwellings are not eligible but a single heat source servicing at least 2 dwellings are eligible providing each dwelling has a separate council tax assessment
The property must be an enclosed building to be eligible for the RHI, however, outdoor swimming pools can be heated but will not receive the RHI for that element.
To gain accreditation and be eligible for the RHI, the heating system must not have previously received grant aid, however, should the grant be repaid, then the installation will be eligible.
Installations must be new and installed post 15th July 2009 to qualify for the RHI.
A heat meter is required to calculate the heat generated. Wood Heat can advise on their specification and placement and reporting to Ofgem to receive the quarterly tariff.

Tariff levels: (subject to an annual increase to RPI)

Up to 200 kW installations

Tier 1 payment – 8.6p per Kwh
Tier 2 payment – 2.2p per Kwh

200 Kw – 1 mW installations

Tier 1 payment – 5.0p per Kwh
Tier 2 payment – 2.1p per Kwh

Tier 1 payment applies to the first 1314 hrs of use in any one year multiplied by the capacity of the boiler and then multiplied by the tariff.

i.e. 199 kW boiler installation
Tier 1 : 199 x 1314 hrs x 8.6p =      £22,487.80p
Tier 2 : 199 x 600 hrs x 2.2p =        £5,752.69p
Total annual payment =                   £28,240.49p