The Renewable Heat Incentive and Solar Systems

After more than two years in the design process the United Kingdom Government has announced it Renewable Heat Incentive, covering renewable heat in England, Scotland and Wales. It is very good news for the environment, and exceptionally good news for environmentally minded people who want to save on their heating bills and on their carbon dioxide emissions. I shall explain my understanding of the incentive and how it applies to solar water heating, which is the concern of my company, Genersys.

The RHI payments of incentives will actually start alongside the Green Deal in 2012, but if you have bought an eligible solar thermal system on or after 15th July 2009, or if you buy a solar system from now on you will still be eligible for the incentive. You will be entitled to an immediate subsidy which will cover you until the formal incentive payments start in 2012, so for practical purposes the incentive is available immediately and for all qualifying systems installed on or after 15th July 2009.

The immediate incentive that you are entitled to claim is what is known as an RHI Premium Payment and will be £300 for your solar system. This will tide you over until the incentives come into force in 2012. If you have an existing solar thermal system you should apply for the RHI Premium Payment of £300 to ensure that you get the annual incentive from 2012.

The annual incentive will be based on 8.5 pence per Kilowatt hour. This should mean incentives of around £300 a year for those with eligible solar water heating systems, for a period of twenty years. The payments to householders will be made quarterly. Payments of the incentive will be administered by Ofgem, and I expect that householders may need to return heat meter readings to ensure they get what they are entitled to receive, although the presently published information is not clear on this point.

There are conditions attached; the equipment you use must be approved (all Genersys panels are approved) and installed by a qualified installer. All Genersys approved installers have the appropriate qualifications to enable you to get the incentives.

Among the conditions that will be attached to the incentives are that you need to have a well insulated home; strictly speaking this has nothing to do with solar water heating, but I can understand the reasoning; if the taxpayer is to subsidise solar water heating (and the taxpayer should) there is no reason why the person receiving the subsidy should not lay out a one off payment for insulating his home, which should cost significantly less than the first incentive payment.

It is important to bear in mind that the renewable Heat Incentive is not the only incentive that a householder will enjoy when installing a solar water heating system. In addition to the incentive payments the householder will get the benefits of reduced energy bills. Good solar water heating systems should produce between 70% and 50% of the energy required for water heating for an average home, and an average home will spend about a third of its heating bill on water heating, although a very well insulated home with larger occupancy than average will spend a much higher share on water heating.

I have not yet been able to see how the RHI will work for people using solar thermal panels for heating support. As soon as I know I shall let you know.

Large commercial solar thermal installations under 200kWh will also qualify for the Renewable Heat Incentive. The government will bring into the RHI solar systems that are larger than 200kWh once the government has more information about them.

I am at this stage only able to set out what I understand to be the important details about the RHI.

The Energy Secretary, Mr Greg Barker, has set out a more comprehensive guide to the Renewable heat incentive, which you can access at

http://www.decc.gov.uk/assets/decc/What%20we%20do/UK%20energy%20supply/Energy%20mix/Renewable%20energy/policy/renewableheat/1387-renewable-heat-incentive.pdf

3 Responses

  1. There are some inaccuracies here which are corrected in my post of 17th March 2011

    Robert Kyriakides

  2. There are some inaccuracies here which are corrected in my post of 17th March 2011

    Robert Kyriakides

  3. […] Comments robertkyriakides on The Renewable Heat Incentive a…robertkyriakides on The Renewable Heat Incentive a…robertkyriakides on A Road Map […]

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