The UK Renewable Heat Incentive
The UK has an obligation to reduce the amount of carbon it emits. There are many sectors of society that consume a lot of energy and emit a lot of carbon: energy production, transport, commerce to name a few. Space heating and hot water in buildings accounts for more than 60% of the carbon emissions that the UK emits. There is a scheme in place in the UK called the Feed in Tariffs, which awards electricity generation from renewable sources, such as solar PV arrays or wind turbines, with long term revenue. The Renewable Heat Incentive is intended to provide similarly attractive revenue for renewable heat generation.
Renewable heating implementation timescale
The first phase of the RHI focuses on large-scale systems suitable for municipal and commercial buildings. The government has stated that all technologies installed since July 2009 will be eligible for the scheme.
The full domestic version of the RHI will launch in October 2012, to coincide with the Green Deal, a government policy supporting energy efficiency in homes. Until that time, £15 million will be made available in grants – called Renewable Heat Premium Payments – to subsidise the cost of installing a domestic-scale renewable heating system. The government will announce details of these grants in May 2011 and make them available from July 2011. The initial estimates for the grants are £300 for solar thermal; £850 for air-source heat pumps; £1250 for ground-source heat pumps; and £950 for biomass boilers. Recipients of the grants will be expected to provide feedback on their experience using the technology.
Which renewable heating technologies are covered?
Phase one of the scheme will focus on large-scale installations. Technologies that are eligible are biomass boilers, ground-source heat pumps, solar thermal collectors, and biomethane (a renewable gas that can either be burned for heat or injected into the gas grid). Other technologies are being reviewed for possible future inclusion. For example, air-source heat pumps are expected to be included in the domestic version of the scheme when it launches in 2012.
Renewable heating revenue rates
Large-scale systems will receive the following tariffs for each unit (kWh) of heat produced:
- 3–4.3p for ground-source heat pumps, depending on the system size
- 8.5p for solar thermal systems
- 6.5p for biomethane combustion or injection
- The tariff for biomass boilers is more complex, to remove the possibility that system owners become incentivised to burn more fuel than they actually need. It works out at 1.9–7.6p per kWh of heat, depending on the size of the system and the amount that is used. The tariffs for the domestic version will be consulted on in October 2011 and announced in due course.
The amount of heat being generated will be metered for large-scale systems so that the appropriate revenue is earned. For domestic scale systems, it is more likely that the revenue payments will be based on expected annual generation rather than a meter reading.
