What is the Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is a UK Government scheme set up to encourage uptake of renewable heat technologies through the provision of financial incentives. The first phase of this scheme targeting commercial, industrial and public sector organisations has been in operation successfully since 2011.

 The DECC latest announcement

House icon


Launched 9 April 2014 for homeowners, private and social landlords and self-builders.


Industry icon


Launched November 2011 for industry, businesses and public sector organisations.


How does the domestic RHI work?

  • A homeowner first needs to have a Green Deal Assessment carried out on their property.
  • The Energy Performance Certificate (EPC) produced as part of this assessment will give the estimated heat use for the property on which payments will, in most cases be based.
  • If 250mm loft insulation and cavity wall insulation is recommended by the Green Deal Assessment this must be installed and an updated EPC obtained from the installer.
  • The ‘deemed’ annual energy usage from the EPC is then multiplied by the biomass tariff which has been confirmed at 12.2p per kWh and the total is paid to the home owner quarterly.
  • Payments are made for 7 years and increase each April in line with the Retail Price Index (RPI).

Example: 3 bedroom house with deemed annual heat demand of 40000kwh

Multiplying this figure by 12.2p would give the annual RHI grant figure of £4880, which would be paid as four quarterly payments of £1220. At a rate of inflation rate of 2.9% over seven years the total RHI payments would be £37279.78.

What is supported?

The RHI will support (support rates vary depending on the technology installed);

  • Biomass Systems
  • Air Source Heat Pumps
  • Ground Source Heat Pumps
  • Solar Thermal Technologies

Example: Biomass

Households in off-gas grid locations have the most to gain by changing to a biomass boiler. In addition to the money which can be obtained through the RHI scheme, the wood pellet fuel for a biomass boiler is almost 50% cheaper than heating oil or LPG. With the RHI and fuel savings combined we anticipate that the full cost of an installation will be recouped by a home owner within 3 – 4 years. There really has never been a better time to change to biomass.