After a period of uncertainty caused by the change in government, it seems that the Renewable Heat Incentive (RHI) is still very much in the pipeline. Speaking today at Portcullis House, Charles Hendry, Minister of State for the Department of Energy and Climate Change, confirmed that the Government is looking seriously at the RHI and understands the benefits it can bring but that there are challenges in how to pay for it. These will be welcome words for the industry and all those who have or are considering investing in renewable heating systems, especially after the abrupt closure of the Low Carbon Buildings Programme.
The Renewable Heat Incentive will be a payment for generating heat from renewable sources. Like the Feed-In Tariffs, it is set centrally, however where it differs slightly is that it is administered by the official regulator Ofgem. However, the Renewable Heat Incentive is still for everyone – homeowners, tenants, businesses, schools, hospitals, farmers or landlords.
Householders will save money by not having to use any gas or oil, the prices of which have risen steadily in recent years. Additionally, they will be paid up to 18p/kWh for the hot water and heat they generate and use. It depends on exactly what systems are employed and how large they are as to what the exact tariff level is.
Tariffs will last between 10 and 23 years depending on the type of system. Solar thermal payments will run for 20 years. Which should be more than enough time to pay off their installation costs. Most will be paid for in about seven to nine years. According to the government, which has set the tariff levels, the average user will earn a return of around 8 to 12% per annum.
Tariffs will be paid starting in April 2011. However, any suitable system installed from now July 15th 2009 will be eligible for the tariffs when they begin. There are technical and accreditation requirements (MCS) but recommended suppliers will be able to cope with this.
URBAN ENERGY
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