Renewable Heat Incentive – Confirmed until March 2021

BEN welcomes the Government confirmation of the continuity of the RHI until 31 March 2021.

RHI Commercial tariffs

Renewable Heat Incentive
RHI tariffs
from April 2017
RHI tariffs
from April 2018
RHI tariffs
from April 2019
RHI tariffs
from April 2020
Tariff lifetime
in years
Ground source heat pumps 9.09 9.36 9.56 9.68 20
Air to water heat pumps 2.61 2.69 2.75 2.79 20
Solar thermal 10.44 10.75 10.98 11.12 20
Biomass 2.96 3.05 3.11 3.15 20

Tariffs increase with CPI each April.

RHI Tariffs Guarantees

The Government have introduced "Tariff Guarantees" which can allow payment of RHI on heat pump installations over 100kW capacity at a rate fixed when the Tariff Guarantee is granted. These can permit payment of the RHI to heat pump systems over 100kW installed by 31 March 2022 (this also applies to biomass over 1MW, biogas over 600kW and CHP using solid biomass, biomethane and geothermal). However, there is no certainty or guarantee until Ofgem has accepted the application, which can take months. There have already been "degressions" of 28% announced on ground source heat pumps over 100kW capacity by 1 July 2021, and there is the likelihood of further "degressions".

Is there Life after RHI?

It appears that the Government plans to move away from subsidy towards issuing instructions or prohibitions. From 2005 it has no longer been legal to install a gas boiler which was not a condensing boiler. Similar types of compulsion may be seen in future, possibly linked to planning permission. It is likely that such mandatory instructions will come into force well before the RHI for new installations ends on 31 March 2021.

Now is the time to invest in Ground Source Energy installations

The RHI will continue to be paid for installations completed and commissioned before 31 March 2021. After 31 March 2021 new installations may not receive any form of subsidy – unless they are ground source heat pump installations over 100kW capacity which can negotiate tariff guarantees through Ofgem and be commissioned by 31 March 2022.

RHI contributes to realistic payback periods for renewable heat

For those installing ground source energy while the RHI is still available the RHI income will normally be larger than the annual running cost: this provides a significant contribution to the higher initial capital cost of ground source installations.

The tariff for GSHPs is now over three times the rate for biomass.

Take advantage of the opportunity to invest in ground source heating while the RHI budget lasts!

However, remember that it is critically important for a ground source installation to be well designed, well installed and well controlled for you to achieve the full financial reward.