Renewable Heat Incentive (RHI)

Britain will take a phased approach to implementing its Renewable Heat Incentive (RHI) scheme, according to details published by the government on 10 March 2011.

Payments under the RHI scheme will be made quarterly over a 20 year period to owners of heat installations and will be based on the actual renewable heat output computed by meters. Only ground source and water source heat pumps for the non-domestic sector will be eligible from the outset of the scheme, with the cooling function of heat pumps and exhaust air heat pumps, however, not being eligible. Air source heat pumps will be considered for eligibility from 2012, when the second phase of the scheme will be introduced and will also cover long-term tariff support for the domestic sector.

Phase 1: Long-term tariff support for the non-domestic sector + one-off subsidies for domestic installations

Initially, long-term (20 years) tariff support will be targeted at the big emitters in the non-domestic sector, covering everything from large-scale industrial heating to small business and community heating projects.

Contrary to previous scheme proposals, air source heat pumps will not be eligible for tariff support from the outset of the scheme, which will initially provide the following support levels to heat pump owners in the non-domestic sector:

Eligible technology Eligible size Tariff rate (pence/kWh) Tariff duration Support calculation
Small ground source heat pumps, water source heat pumps, deep geothermal Less than 100kWth 4.3 20 years Metering
Large ground source heat pumps, water source heat pumps, deep geothermal 100kWth and above 3 20 years Metering


“Air source heat pumps will not be supported from the outset because more work is needed to better understand the costs associated with the technology and, for air to air heat pumps, work is ongoing to develop a robust methodology for measuring heat delivered in the form of hot air”, reads the document detailing

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the scheme. “Subject to successful conclusion of this work and other factors (such as the role of cooling as opposed to heating in such systems) we intend to extend eligibility to this technology from 2012”.

In the meantime, as from July 2011 and until the second phase of RHI is introduced that will cover also the domestic sector, the British government aims to launch the Renewable Heat Premium Payments scheme. This scheme will subsidise the cost of installing qualifying renewable heating systems, including heat pumps. Policy makers in Britain will consider whether to focus this type of support for primary heating systems, such as heat pumps, on households off the gas grid. Funding of about £15 million will be made available for the purpose, with more details on the scheme expected in May 2011.

“The Renewable Heat Premium Payments will help ensure that, before we commit to long term payments in a sector where it is difficult to predict levels of take-up and levels of performance of the different heat technologies, we manage their roll-out and learn more about them, as well as controlling budgets and ensuring the money goes where it is intended to”, states the document.

Phase 2: long-term tariff support also for the domestic sector; air source heat pumps may become eligible

The second phase of RHI support will be introduced in 2012 and will also cover long-term tariff support for the domestic sector.

In the second phase, the government will also consider introducing support for a number of other technologies and fuels that are not supported from the outset, such air source heat pumps.

Download the full document here.

The Department of Energy and Climate Change is welcoming comments on the RHI regulations to this e-mail address:

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