Renewable Heat Incentive

April 2011 will be a major milestone for the UK renewable heat sector. From this date, the government’s ‘Renewable Heat Incentive’ (RHI) will commence. We firmly believe the market for heat pump installation will be transformed by this initiative.

In place of the existing modest grants available under the Low Carbon Building Scheme, producers of renewable heat from heat pumps, biomass and solar panels will receive a tariff payment for every unit of heat energy they produce.

Carbon Zero Consulting will be providing briefing notes as more details of the scheme are revealed. However, it is already clear that users of domestic and commercial heat pumps will receive sufficient tariff payment to at least pay for the electricity used to operate their heat pump. In other words, the heat you produce will be free and capital payback will be at least halved. The payments are thought to be guaranteed for 20 years. This will provide a return on investment in renewable technology of up to 8%.

How is this to be paid for? The answer is that everyone’s bills for oil, gas or electrical heating will increase. The money raised will be used to fund the RHI scheme. The objective is for the RHI to be a major driver to accelerate the move from ‘dirty’ fossil fuels to renewable heating systems.

All systems installed after 16th July 2009 will qualify for RHI payment from April 2011, and systems installed between now and April 2011 will ALSO get the one-off grant payment. What possible reason can anyone now have for not ‘going renewable’?!

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