March 2011
Renewable Heat Incentive Scheme - A chance to get paid to invest in renewable heat
If you are interested in installing a Ground Source Heat Pump system (GSHP), we are pleased to let you know that the commercial benefits of this decision are hopefully about to fundamentally change – for the better…
With the help of the Department of Energy & Climate Change, significant financial support is likely to be available for all GSHP installed after the 15 July 2009 for up to 20 years, radically reducing the time it takes to recover your initial capital investment. Systems installed after 15th July 2009 will be eligible to join the Renewable Heat Incentive (RHI) scheme but will only be able to claim payments from June 2011 onwards (for non-domestic sectors) and the 2nd phase for the domestic sector from 2012. In the meantime savings can still be made on heating bills. It is proposed that this scheme will be available to households, business, local authorities, industrial premises and social housing.
So what’s changed for GSHP?
Following extensive industry input, the government published a consultation on 1st February 2010 outlining the proposed design of the RHI, which was then announced on 10th March 2011 that it had the go ahead and start in June 2011. The proposal suggests annual payments over 20 years; targeting approximately a rate of return of 12% p.a. on the additional capital cost of installing GSHP. RHI payments will be claimed by and paid directly to the owner of the equipment based on a deemed or standard calculation basis for small to medium installations. Large installations are likely to be assessed on an individual case basis.
Installers and equipment used must be certified under the Microgeneration Certification Scheme (MCS) and all payments will be guaranteed for 20 years and linked to inflation. Payments will be calculated on the deemed annual heat output, in kilowatt hours, that your GSHP would normally provide. This will allow the homeowner to receive a set amount and should encourage low energy consumption whilst discouraging wasteful over production of heat.
Proposed incentive Tariffs
Small Systems up to 100kw – 4.5p/kWh for 20 years
Large Systems 100kw and above – 3.2p/kWh for 20 years
Prices would be recalculated prior to the start of the RHI, taking into account inflation.
