What is a Renewable Heat Incentive?

The Renewable Heat Incentive (RHI) is a World leading scheme to encourage the promotion of renewable heating systems in the UK. The scheme expected to launch in June 2011 will provide financial support for homes and businesses across the community to switch from using fossil fuel for heating to renewables such as heat pumps, wood fuel boilers, and solar thermal.

The proposed scheme will see householders paid on an annual basis according to the size of the installation in relation to the amount of hot water required to heat your home. Any projects installed after 15th July 2009 will be eligible for the subsidy from the Government.

How much could I earn from the Renewable Heat Incentive?

The key proposals from the Government include; inflation rising payments, a limit in size of 45KW installation (an average size housed would require 5-8kw), 12% return on the capital costs of renewables, with a lower rate of 6% return on solar thermal. Current estimates predict 7.5p kWh for an air source heat pump, 18p kWh for solar thermal, 7p kWh for ground source heat pump. An installation of £10,000 would yield a return of £1,200 a year for up to 20-25years. This doesn’t include the savings from cheaper fuel bills.