The Government has announced its long awaited Renewable Heat Incentive (RHI) scheme to support the adoption of renewable energy technology for the generation of heat in the domestic and non-domestic markets.
This announcement comes in the wake of the FITs (Feed in Tariffs) review which has seen the tariffs for large scale solar PV developments significantly cut from the levels set only last year, which has caused a lot of uncertainty in the growing renewables sector.
All non-domestic and domestic accredited and registered installations commissioned since 15th July 2009 will be eligible. Long-term tariff support will initially be targeted at the big heat users ? the commercial, voluntary and public sectors ? which contribute 38% of the UK?s carbon emissions.
Domestic installations will be introduced in two phases:
- In the first phase, there will be focused support (see below) of around £15 million for households through the Renewable Heat Premium Payment; payment details are due in May 2011 and payments from July 2011
- The second phase of the domestic RHI scheme will see households moved to the same form of long- term tariff support offered to the non-domestic sector in the first phase. This transition will be timed to align with the Green Deal which is intended to be introduced in October 2012.
Key aspects of the RHI from 2011
The Gas and Electricity Market Authority (Ofgem) will administer the RHI including:
- Dealing with applications
- Accrediting installations
- Making incentive payments to recipients; and
- Monitoring compliance with the rules and conditions of the scheme
- Support for a range of technologies and fuel uses including solid and gaseous biomass, solar thermal, ground and water source heat-pumps, on-site biogas, deep geothermal, energy from waste and injection of biomethane into the grid
- Support for industrial and the commercial sector; the public sector; not-for-profit organisations and communities in England, Scotland and Wales through the RHI tariffs
- Support for households through the Renewable Heat Premium Payment in the first year of the scheme until the Green Deal is introduced in October 2012 when households will become eligible for RHI tariffs
- The RHI will be funded from general Government spending, not through the previously proposed
Key aspects of the non-domestic sector
- RHI payments to be claimed by, and paid to, the owner of the heat installation or producers of biomethane for injection;
- Payments will be made quarterly over a 20 year period;
- For small and medium-sized installations (up to and including 45kWth), both installers and equipment to be certified under the Microgeneration Certification Scheme (MCS) or equivalent standard, helping to ensure quality assurance and consumer protection;
- Tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems, with additional compensation for certain technologies for an element of the non-financial cost;
- Heat output to be metered and the support calculated from the amount of heat used for eligible purposes, multiplied by the tariff level;
- Biomass installations of 1 MWth capacity and above will be required to report quarterly on the sustainability of their biomass feedstock for combustion and where they are used to produce biogas.
Key aspects of the domestic/household sector
In May 2011, further details on the eligibility criteria for the Renewable Heat Premium Payment will be published, yet will include the following principles:
- A fair spread of technologies across all regions of Great Britain;
Monitoring to enable government, manufacturers, installers and consumers to better understand how to make sure ?real life? users get the most out of them, and to inform decisions on the tariff levels and other scheme parameters for phase 2;
- A well-insulated home will be required, based on its energy performance certificate;
- A householder must agree to monitor and record performance; between 45kWth and 1MWth receipts for ancillary fossil fuels consumed must be kept for auditing and such use should aim to be
- A focus on people living off the gas grid, where fossil fuels like heating oil are both more expensive and have a higher carbon content.
These 2010 prices will be updated to 2011 prices, in line with the Retail Price Index, before the start of the RHI scheme. It is notably that the Feed-In Tariff 2011 adjustment announce in March 2011 was 4.8%. This adjustment will apply for both new and existing installations.
For more information about your scheme contact the team at Aardvark EM Ltd