World's first Renewable Heat Incentive launched in the UK

The Renewable Heat Incentive (RHI) will support emerging technologies and businesses in the UK to reduce emissions and strengthen security of energy supply.

The new financial incentive will encourage installation of equipment using renewable energy  like heat pumps, biomass boilers and solar thermal panels to reduce emissions and support the existing 150,000 jobs in the heating industry.

Long-term tariff support for heat pumps will initially be targeted at ground and water source heat pumps - with a min. COP of 2.9 - for the industrial, business and public sector, as well as not-for-profit organisations and communities. Later on, support is expected to be enlarged to air-source heat pumps and domestic applications. However the current subsidy available to MCS certified installations will continue. 

RHI installations since 2009 can qualify (details still need to be clarified) and DECC (Department of Energy and Climate Change) plans to work out the details of the deal with industry up to May 2011.

Headlines are:

  • Year 1 primarily industrial and commercial with domestic around 15% ring fenced of £55m spend.
  • Year 3 will be around £415m total.
  • The premium is a deemed payment payable at time of purchase and this means there will be some incentive from 2011 but not simply tariff based (as initially expected).
  • The RHI launches in July 2011 but the full scheme starts proper for domestic (i.e. under a tariff basis) from 2012.
  • Green Deal is linked as an entry point.
  • According to the Minister, Year 1 qualification will be D rated dwellings moving to C in 2012.
  • air-to-water and air-to-air heat pumps out of year 1 for commercial.
  • RHI installations since 2009 can qualify (details still need to be clarified).

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