The Renewable Heat Incentive is the first scheme of its kind in the world. It is the government’s intention to take a holistic approach to encouraging renewable energy. The Renewable Heat Incentive will, therefore, be introduced alongside the new Green Deal, offering long-term financial support to householders who commit to renewable heat installations.
The Renewable Heat Incentive currently offers a generation tariff for every kilowatt-hour of heat energy from renewable energy sources in the non-domestic sector.
A non-domestic installation is a renewable heat unit that supplies heat to anything from large-scale industrial heating to small business and community heating projects. This includes small businesses, hospitals, schools etc as well as district heating schemes (e.g. one boiler serving multiple homes).
For solar collectors with less than 200 kWhth, the tariff is 8.5 pence per kWh generated.
Incentives For The Domestic Sector
The Renewable Heat Incentive will be available to domestic users in the autumn of 2012 - the exact composition of the grants are yet unknown. The Renewable Heat Incentive scheme will be open, not just to new applicants, but to applications from people who have installed appropriate equipment since July 2009 and those already receiving support under the Renewable Heat Premium Payment scheme. The exact eligibility criteria, however, are still to be decided. Once the details have been finalised, Ofgem will be in a position to start considering applications from householders.
Until the Renewable Heat Incentive is open for homeowners, one should look for the Renewable Heat Premium Payment which was introduced in 2011 and offers support to households, particularly those situated off the main gas grid, to introduce improved primary heating systems, such as heat pumps and biomass boilers. The rationale behind starting with these households was that such properties tend to use fossil fuels, which are more expensive and have a higher carbon content.