The Renewable Heat Incentive is a payment for generating heat from renewable sources. It’s been designed by the Government and is regulated by Ofgem, who pay the tariffs using money from the Treasury.
For the RHI participants they not only save money by reducing their increasingly expensive current energy bills, but also receive RHI Payments for the energy they produce from renewable sources. This figure is dependent on the type of system installed, with the Government setting the following tariffs for Non-Domestic organisation using biomass:
|Tariff name||Eligible Technology||Eligible Sizes||Tariff Rate (p/kWh)|
|Small biomass||Solid biomass||Up to 199kW||Tier 1: 4.4, Tier 2: 1.17|
|Medium biomass||Solid biomass||200kW-999kW||Tier 1: 5.18, Tier 2: 2.24|
|Large biomass||Solid biomass||1000kW and above||2.03|
The tariffs are paid for a guaranteed 20 year period from the registration date and are adjusted according to index-linked inflation rates. It’s estimated that within 7-9 years the RHI participant will have paid off their installation costs and can then expect income for the remainder of the agreed period. The Government have predicted that most systems should see a return of approximately 12% per annum.
For a full breakdown on RHI payments please see the RHI Financials section of our website.