Renewable Heat Incentive and Changes to Feed-in-Tariffs

RHI Tariffs are payments made to the owner of the system for every kWh of renewable heat produced. Tariffs have been carefully formulated to result in an approximate 12% return on investment or an 8-12 Year payback period. This is to make all generation methods supported under the scheme equally attractive to prospective investors.

Government concerns over the ability for developers to cash in on large scale solar systems and photovoltaic farms have, however led to changes in the FIT scheme. The tariff has been reduced for systems over 50kWh, to ensure the available funding will remain available for domestic and small scale user generation.

RHI Tariffs will be determined on similar lines. A small scale domestic biomass system up to 200kWh can claim 7.6p/kWh it produces. In contrast, a large commercial scale biomass system over 2000kWh can only receive a maximum of 2.6p/kWh.

The Government, however, has backed both Anaerobic Digestion electricity generation and Biomethane heat generation with attractive tariffs for large scale commercial applications. Biomethane plants can claim 6.5p/kWh under the RHI, whilst Anaerobic Digestion plants can receive 13-14p/kWh via Feed-In-Tariffs.

Grants are now available for underprivileged households to install renewable heat systems. This is in preparation for when the RHI becomes available for households in October 2012.

DECC. Renewable Heat Incentive, March 2011