How Does the RHI Scheme Influence Households Adopting Green Energy Solutions?
To avoid disappointment from switching to a green heating system, I recommend that you carefully consider the pros and cons with regards to your particular case. Here I offer you an easy to use guide that will give you more insight into the steps to making a successful RHI application.
A financial incentive, the RHI has been introduced by the Department of Energy and Climate Change to encourage the UK population to switch to renewable heat. In line with the EU objective to cut carbon emissions, the RHI scheme offers owners with renewable heating systems quarterly payments for the period of 7 years.
Besides the obvious benefits for owners that prefer environmentally-friendly heating solutions, the RHI is not thought of as an unlimited source of financial support. The so-called ‘digression mechanism’ is the one balancing the RHI budget, which means that the more households adopt green energy solutions, the less the amount of quarterly payments will be.
However, payment reductions affect only households that have not yet made an application at the time the decrease is introduced. The Office of Gas and Electricity Markets (Ofgem) is the national authority that administers the RHI. Whenever there is a change in the RHI payments, Ofgem makes an announcement one month beforehand on its website.
As explained in our guide, before considering green energy and the RHI, make sure that a renewable heating system is something that will benefit your household. If you have already made up your mind to install a renewable heating system, read on and find out how to apply for the RHI in time before the payments are further reduced.
RHI: Approved Renewable Heating Systems
Not all renewable heating systems are approved for the RHI. Remember that the RHI quarterly sum depends on the type of system you decide to install, its size and heat level as well as whether there has been integrated a conventional heating system or not.
There are four renewable heating systems, approved for the RHI so far:
- Biomass only boilers and biomass pellet stoves
- Ground source heat pumps
- Air source heat pumps
- Solar thermal panels, flat plate or evacuated tube only
To be in line with the RHI requirements, the biomass or heat pump systems must heat the rooms of your home or provide both air and water heating. Further, according to the rules, the installation has to use a wet central heating system like e.g. radiators, when heating.
It is important to remember that in the case of biomass and heat pumps, the rules require that you heat water for domestic use inside your home. That description excludes water used for heating swimming pools or any other use different from “domestic hot water”. In the case of solar panels, the ones eligible for the RHI are those that provide only hot water to your home.
RHI: Application Guide
Keep in mind that there are certain steps you will need to fulfil before delivering an RHI application that would be approved. You can see these steps in the guide below.
- Make sure that a renewable heating solution is the best option in your particular case. For example, if your household is on mains gas, switching to renewable heating will not be cost-effective
- Before purchasing a renewable heating system, make a thorough research about the appropriate equipment and certified MCS installers. I would recommend checking forums, blog posts and talking to people that have the first-hand experience with both equipment and installers. You can start by checking the RHI eligibility product list, published by Ofgem and the MCS list of authorized installers
- Get the Energy Performance Certificate (EPC) for households either for England and Wales or Scotland. The objective of EPC is to prove that your property is a domestic “dwelling”, e.g. owners that live in their own homes, private and registered social landlords or self-builders. If you rent a property, you will need permission from your landlord to install a renewable heating system
- Next, you will need a Green Deal Assessment
- Make sure that you are aware of the RHI requirements and your own responsibilities
- In the end, apply for the RHI
RHI: Be Aware of...
Besides the definite advantages of the RHI, be aware that the more households adopt renewable heating systems, the lower the RHI payments will be, in line with the scheme budget management. That means that if you are certain that green energy solutions will benefit your household, the sooner you install the one appropriate for your home the higher the RHI quarterly payments will be.
Then, remember that by being approved for the RHI does not necessarily mean that you will be getting the payments for the full 7 years. To do that, you will have to make certain that you fulfil your responsibilities stated under the RHI rules at the time you have been approved for the tariff.