Energy Guides

Get paid to generate heating with the Renewable Heating Incentive

Dominic Welling dominic.welling@consumerchoices.co.uk

The Renewable Heating Incentive (RHI) was given the green light in the government’s Spending Review, but what exactly does this mean for you?

As part of its spending review last week the government confirmed that its Renewable Heating Incentive (RHI) will go ahead as planned next year, and people will start to receive money for the heat they produce from April 2011.

But what exactly does the scheme entail and how can you earn money from it?

The scheme

The Renewable Heat Incentive is the government’s plan to encourage the growth of renewable energy techniques in households.

Similar to Feed-In tariffs which cover the generation of electricity, participants will be paid a fixed amount by the government for the energy they produce by using renewable sources, like solar thermal panels or a wood burning boiler.

In simple terms, the Renewable Heat Incentive has three steps:

1. You install something like solar thermal panels, heat pumps or a biomass (wood burning) boiler to start generating renewable energy
2. An estimate will then be made as to how much energy your system will generate
3. You will then be paid a fixed amount from the Treasury based on that estimate.

This differs from the Feed-In tariff scheme in a couple of major ways.

Firstly, because there is no such thing as a National Grid for heating - all households produce their own heating - so there is no talk of importing or exporting tariffs.

Also the money to fund the Renewable Heat Incentive comes completely from the government and is not paid for by other energy users or suppliers as with the Feed-In tariffs.

Eligibility

Every household, business, landlord, farm, school etc in England Scotland and Wales is eligible for RHI as long as there is a qualifying renewable heat system installed.

Any household with a system installed after 15 July 2009 which qualifies, will be entitled to receive the money as of April next year.

The sort of heating systems that qualify for the scheme include:

• Different types of heat pumps - such as air or ground source pumps.
• Solar thermal heating
• Wood pellet heating
• Biomass heat generation

Feed-in tariffs

The Renewable Heating Incentive is similar to the existing Feed-In tariff scheme for renewable electricity.

Feed-in tariffs pay homeowners for all electricity they produce. They also earn money for every unit they do not use that is exported to the grid.

The government scheme is for homes that have things like solar panels, wind turbines, or hydroelectricity systems installed.

Households eligible for feed-in tariffs will benefit by being paid a set rate for any energy they produce, even if they use it all.

A further 3p per kilowatt hour (kWh) will be paid for homes that export electricity back into the National Grid.

Furthermore, by generating their own energy, the households’ energy bills are obviously significantly reduced leaving them much better off over the course of the year.