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What is the RHI?

The RHI Scheme

The Renewable Heat Incentive scheme (RHI) is a Government initiative to encourage and reward the installation and use of renewable heat equipment. The financial incentive not only covers the cost of the initial installation but also provides regular payments over a 20 year period (for non-domestic installations).

The UK government is committing £860m into renewable energy to boost the uptake of this type of energy and crucially increase the total amount of heat produced from these sources from 1% to 12%. As heating is responsible for around 50% of our carbon emissions, this leap would reduce the amount of C02 created by the UK by approximately 60million tonnes by 2020 – helping to minimise the effects of climate change.

A number of different technologies fall under the Renewable Heat Incentive scheme, including biomass (wood pellets), solar panels and ground source heat pumps. Domestic and commercial energy users who replace their existing heating source with a renewable energy will become eligible for the quarterly payments for 20 years. The amount you are eligible to receive is dependent on your energy usage.

The Renewable Heat Incentive scheme has been split into two phases:


The first part of the RHI scheme has focused on non-domestic, industrial, business, public sector and commercial organisations. These big heat users account for around 38% of the carbon emissions. Phase one opened in November 2011 and applications could be made from this point.

For domestic users, Phase one also saw the launch of the Renewable Heat Premium Payment Scheme, which provided a grant towards the cost of installing renewable energy equipment.


The domestic RHI launched in April 2014 and is open to homeowners, private landlords, social landlords, and self-builders. Any renewable heat installation in place since 15th July 2009 is eligible for the financial incentive, providing they meet certain eligibility criteria. This includes those who took up the Premium Payment scheme previously. 

The uptake in renewable energy has been greatly accelerated by the RHI and both domestic and non-domestic users are now receiving money for the energy they use – rather than vice versa. 

Next page >> How much does it pay out?