The Domestic Renewable Heat Incentive (“RHI”) scheme remains open to applications for new air source heat pump and ground source heat pump installations.
However, the scheme is set to end on 31st March 2022 for new applicants - that’s less than 12 months away! If you are considering a ground source heat pump or air source heat pump for your home, now is the time to act in order to benefit from this generous Government grant scheme and avoid missing out on thousands of pounds worth of incentives.
What Is The Renewable Heat Incentive
The RHI is a government financial incentive to encourage a switch to renewable heating systems including ground source heat pumps and air source heat pumps. The scheme started in April 2014 and despite a couple of extensions, is now due to come to a close for new entrants on 31st March 2022. If you join and comply with the scheme rules, you’ll receive quarterly payments for 7 years.
Owners of heat pumps will be paid quarterly over this 7 year period for all of the eligible renewable heat generated by the heat pump in the property. Eligible renewable heat includes the energy required for heating the home and providing domestic hot water. Payments are usually based on a deemed amount of heat produced by the heat pump, and are index-linked, meaning payments should increase year on year.
The tariffs shown in the table below represent the amount you receive for each unit of renewable heat generated by your heat pump to heat your home.
| Technology | RHI Tariff [p/kWh] |
|---|---|
| Ground Source Heat Pump | 21.29 |
| Air Source Heat Pump | 10.92 |
Table showing RHI Tariffs applicable from 01/04/2020 - 30/06/2021
“A typical 4-bedroom detached house will earn over over £1,200 per annum from the RHI scheme with an air source heat pump.”
Worked Example - AIR SOURCE HEAT PUMP
For a typical 4-bedroom detached house
Annual space heating and hot water requirement - 15,000kWh
Air source heat pump system capacity - 11kW
Air source heat pump seasonal performance factor - 3.99
(assuming 45C flow temperature)
This means that for each unit of electricity consumed, the heat pump produces 3.99 units of heat. The "renewable heat" is the difference between the total heat output and the electricity input. So for this example, for every 3.99 units of heat produced, 2.99 units are classed as "renewable heat", which is 75%.
Renewable Heat = 15,000kWh x 75% = 11,241kWh @ 10.92p/kWh = £1,227 per annum
TOTAL ANNUAL DOMESTIC RHI PAYMENT = £1227 PER ANNUM
For an air source heat pump in a typical 4 bedroom house, the RHI generates more than £8,500 over 7 years
Worked Example - Ground Source Heat Pump
For a typical 5-bedroom detached house
Annual space heating and hot water requirement - 20,000kWh
Ground source heat pump capacity - 14kW
Ground source heat pump seasonal performance factor - 3.33
(assuming 40C flow temperature)
This means that for each unit of electricity consumed, the heat pump produces 3.33 units of heat. The "renewable heat" is the difference between the total heat output and the electricity input. So for this example, for every 3.33 units of heat produced, 2.33 units are classed as "renewable heat", which is 70%.
Renewable Heat = 20,000kWh x 70% = 14,000kWh @ 21.29p/kWh = £2,981 per annum
TOTAL ANNUAL DOMESTIC RHI PAYMENT = £2,981 PER ANNUM
For a ground source heat pump in a typical 5 bedroom house, the RHI generates more than £20,000 over 7 years
“For ground source heat pumps in particular, any future incentives are likely to be far less generous.”
Act Now!
The current tariffs are at the highest level they've ever been, with more paid for each unit of renewable heat created by the heat pump than ever before. Coupled with the fact that scheme is ending in under 12 months time, it is really time to act now.
If you have had a quote from us in the past, then please get in touch with your account manager to receive an updated quotation.
12 months might seem like a long time, but we know from experience that with retrofit projects in particular, things can take a bit longer than you might expect. Furthermore, as we get into the Autumn and Winter, there is likely to be a huge demand for getting systems completed and commissioned on time.
If you’ve been thinking about heat pumps for your project, then please do get in touch today to find out how much you could earn from the RHI scheme. Our expert sales team have all the latest industry tools to calculate the payments you are likely to receive. Get in touch today to speak with one of our team, who can advise you on the economics of any potential project.
For Heating Installers
If you’re a heating installer with customers looking to replace their old fossil fuel heating systems, get in touch with us to find out how we can support you installing heat pumps for your customers.
Under our MCS umbrella scheme, Alto Energy takes responsibility for the design and sizing of the heat pump system, and provides a design, supply, technical support, commissioning and MCS registration service.
MCS is the Microgeneration Certification Scheme, and registration under this scheme is mandatory in order to be able to access the Renewable Heat Incentive. As an MCS accredited company, Alto Energy is fully compliant with the MCS standards, which ensures your customer benefits from the financial rewards available for installing a heat pump in their property.