The Renewable Heat Incentive is a United Kingdom government subsidy, financed by the tax payer, to provide incentive payments for those who install renewable heat. It is essentially an incentive to reward renewable heat installations, rather than low carbon emitting installations and covers solar thermal biomass, ground and water source heat pumps, geothermal, biogas and biomethane technologies, but I shall concentrate on the incentive for solar thermal incentive.
Of all the qualifying technologies for the Renewable Heat Incentive solar thermal is virtually free from producing greenhouse gas emissions and requires the least maintenance and servicing expense. Just as importantly, solar thermal installations have no fuel cost, unlike heat pumps and biomass; with solar the fuel is free in daylight hours and the heat can be stored.
I have limited this guide to the incentives available for businesses (whether industry or commerce) and public sector and not for profit organisations, such as hospitals and schools. By October 2012 the RHI will make incentives available for households. These details have not yet been announced, and I shall explain them as soon as the details are known. I have also concentrated on simple installations – essentially solar systems supplying a single building. There are more complex regulations which relate to other technologies and systems serving several buildings.
The relevant body for approving RHI applications and making payments is the Office for Gas and Electricity Markets – OFGEM. If you analyse the RHI for many businesses and organisations the incentive is a “no brainer” when it comes to installing solar systems in most applications. There will be particular financial benefits for high volume hot water users, such as hotels, hospitals, nursing homes, and industries using heat processes.
Here is what you need to know about the Renewable Heat Incentive:
The Start Date
In order to qualify for the incentive the solar thermal installation must have been completed and first commissioned on or after 15th July 2009. The reason for this is that the Government promised that the RHI would start from this date and some have relied on this promise and made their installations. The vast majority of installations will take place now that the details of the RHI have been announced.
The Size of the Installation, Getting Approved & Other Conditions
The solar thermal system must not exceed 200kWth (kilowatts of thermal energy) in size. In practice this means all but very large installations of solar thermal panels qualify. In terms of Genersys panels in the UK a 200kWth system will be about 180 panels, which requires roof space of more than 320 square metres. That would be a very large system, in UK terms. However the actual the scheme has not defined this size beyond “200kWth”. which is I confess fairly ambiguous to thermal solar engineer whom I have asked to advise and we are seeking clarification on what this upper limit actually is supposed to mean.
You first have to apply for an RHI account with OFGEM, who will approve the solar system that you wish to install, and provide OFGEM with the relevant documents. If all is in order OFGEM will approve the installation and you will get the incentive once the solar system is up and running. Your installer can guide you through the RHI process and provide all the information that OFGEM require.
It is expected that systems above 200kWth will be approved from 2012 onwards, which will at least resolve any ambiguity in size requirements.
The Purpose of the Installation
Your installation will have to deliver heat into a building. The heat delivered can be space heat or hot water or a combination of both and must be delivered through a liquid or steam heat delivery system. Solar thermal installations use a liquid heat delivery system (food safe polypropylene glycol) which is run through heat exchangers to heat water for use or provide space heating or space heating support. It is not required that the solar thermal system is the sole means of heating, and the incentive is arranged in a way that enables solar systems to provide a fraction of the heat demand and still receive proper financial support.
If you have received any other subsidy from public funds (such as the Phase 2 Low Carbon Building Grant) then you cannot receive the Renewable Heat Incentive.
If the installation is smaller than 45kWh the system must be installed by a qualified installer under the Microgeneration Certification Scheme and the panels must also be certified under that scheme or an equivalent scheme. Whatever the size of the installation proposed I would always recommend using a qualified installer and one that is experienced in installations and can show you examples of successful installations. All Genersys panels are fully qualified so if you use them your RHI application will be approved in terms of equipment.
Calculating the Amount of the Incentive
The RHI effectively pays you according to the amount of renewable heat your solar system generates. That means that the heat must be metered by a RHI approved heat meter, and the meter returns sent in to OFGEM, who administer the RHI. OFGEM will calculate the heat that your solar system has generated in terms of kWh and you are then entitled to a subsidy of 8.3 pence per kWh. The is usually more than double the cost of using natural gas to generate heat or hot water and is considerably more than the cost of using electricity or fuel oil.
The RHI is worth more to you than the 8.5p per kWh because you will, by using solar thermal systems, save the cost of the fuel that the solar thermal system has displaced so in effect the incentive must be worth in excess of 12p per kWh. This is good news but the better news is that the 8.5p per kWh is indexed linked.
How the Incentive is Paid
Every three months your energy bill will be credited by the amount of the RHI incentive to which you have become entitled according to the heat meter returns to OFGEM, who will arrange the credit with your energy supplier. Your energy bill will be lower, in so far as the heat aspect of it is concerned because you have been using solar thermal to generate heat and not fuel of any kind.
How Long the Incentive is Paid for
The Incentive is paid for twenty years from when the installation is first commissioned.
OFGEM monitor compliance with the RHI rules and ensure that participants get a fair deal and do not break the rules.
The Renewable Heat Incentive can be obtained for other technologies than solar thermal. With the THI you can heat your building without heating up the planet. Solar thermal is rewarded with the highest rate of subsidy in kWh and has the lowest ongoing maintenance and servicing costs of any other RHI approved technology. It is also the lowest carbon emitter, providing in use almost no emissions and if you use a Genersys solar panel you will have a 20 year no quibble panel guarantee and a life expectancy of more than thirty years.
Filed under: biogas, biomass, carbon emissions, climate change, energy, global warming, heat Tagged: | amount of RHI payments, method of calculating RHI payments, ofgem, renewable heat incentive, RHI, RHI for business, RHI for industry, RHI for non profits, RHI for schools