The Renewable Heat Incentive Scheme
What is the Renewable Heat Incentive Scheme?
The Renewable Heat Incentive (RHI) Scheme has been designed by the government’s Department of Energy and Climate Change (DECC) to encourage homes and businesses to install their own ways of generating heat from renewable sources, due to be launched in 2011.
Despite some initial confusion over the renewable heat incentive scheme caused by the change in government, the Chancellor George Osbourne has leant the coalition government’s support in the October 2010 Spending Review.
Under the scheme you will be paid for every unit (kilowatts per hour, or kWh) of heat you generate. Most of us will likely use all of our heat in our own home, but those lucky enough to be connected to a district heating network will be paid an additional fee for plugging their surplus into the grid.
There are a wide variety of technologies you can use which can be tailored to your budget, space and location. Currently, the types of heat-generation technology covered biomass (woodchips or logs), air-source and ground-source heat pumps (taking advantage of heat available underground or in the air), solar thermal (concentrated heat from the sun used to heat water) or biogas (the burning of methane created by the breaking down of waste, such as manure). These can be implemented on a range of scales: from the domestic environment through to larger scale commercial and industrial settings. As a homeowner, the type of generation you choose will dictate the amount of money you’ll get back.
At this point you may question the reasoning behind the renewable heat incentive scheme. First and foremost, the domestic generation of heat from renewable sources would have a great impact on our carbon emissions. Secondly, as a country, we are legally obliged to meet EU targets to source 12% of Britain’s heating needs from renewable sources. Given only 1% of our heat comes from renewable sources, the renewable heat incentive scheme presents an opportunity to encourage renewable heat generation projects and begin to make a meaningful contribution to meeting the EU targets.
The Drawbacks – what should we look out for?
Some of the available technologies can’t be used by city-dwellers: ground-source heat pumps require garden space whilst biomass boilers produce smoke.
Moreover, traditional heat generators are not covered under the system, so you will not be paid for an open fire or wood-burning stoves.
In addition early adopters of renewable heat generation technology may not be eligible for the renewable heat incentive payments if they installed prior to 15th July 2009. However, depending on your technology choice, current indications are that the renewable heat incentive scheme payments will be guaranteed for anywhere between 10 and 23 years.
Drawbacks aside, the scheme still offers encouragement to those looking for ways to reduce their current reliance on fossil fuels and move to a more sustainable option.
The Benefits – what can we gain?
It almost goes without saying that the reduction to your carbon footprint brought by renewable heat is vast. On top of this, the renewable heat incentive scheme should provide a very tidy cost saving, with the average home expected to make a net profit of around £600 a year.
The scheme should also be welcomed by those living in parts of the country off the current gas grid who are reliant on expensive oil-fired heaters. A renewable heat source also allows households and businesses to control their own heating supply, insulating them against the price volatility and fuel security of foreign gas and oil imports.
Finally, assuming the scheme goes ahead, current indications are that the renewable heat incentive payments will be guaranteed for anywhere between 10 and 23 years.
How can LoCO2 Energy help?
LoCO2 Energy is excited about the renewable heat incentive scheme!
It's a step in the right direction - heating our homes is a necessary part of life but one which still contributes massively to our carbon footprints. It is also an issue which has been somewhat overlooked in the debate about how to make our lives greener, perhaps best illustrated by the suggestion that it was forgotten about during the Liberal Democrat and Conservative Party negotiations prior to forming the coalition government.
LoCO2 Energy offers a tariff for those with a renewable heat generator. Please give us a call for more information and to check whether you qualify.