Renewable energy can be very rewarding
The Renewable Heat Incentive scheme is run by DECC and administered by Ofgem. The scheme embraces solar thermal, biomass, air source and ground source heat pumps. You’ll be paid for every kilowatt hour of heat you produce which is a tangible bonus in addition to cheaper fuels and the emotional benefits of reducing your carbon footprint. If you swap to a biomass boiler and your house uses 40,000 kWh of energy in a year you will earn just over £2,000 a year – £14,000 over the seven year term of the scheme.
The Domestic RHI
This is applicable to any single property that is capable of getting a domestic Energy Performance Certificate. This EPC gives a calculated figure for the amount of heat required by the building in a year and is the figure you’ll be paid against at the appropriate tariff rate (biomass is 5.14p, solar thermal is 19.51p). The tariff is tax free and linked to RPI ensuring the incentive keeps pace with inflation. If you’re switching from an oil boiler to biomass, the payments over seven years can cover most of the cost of the installation and leave you with a fuel that is considered to be carbon neutral and should be cheaper than oil in the long run.
There is a limit of 45kW for any individual biomass boilers (though it’s possible to have two 35kW units cascading together as the building limit is 70kW). Combined with a programme of increased insulation and other energy efficiency measures, this means that even really large properties can take advantage of this incentive
The Non-Domestic RHI
This is for commercial, public or industrial premises or for organisations with district heating systems (a group of houses using one boiler for example). The heat outputs are metered and though the payments are lower than the Domestic phase (<200kW Tier 1 biomass is 3.62p, <200kW solar thermal is 10.28p), the scheme is over a 20 year period. For businesses with large heating requirements, the scheme can turn a liability into revenue stream and it’s proving very attractive.