Renewable Heat Incentive

Remeha is working to help the UK reach its target to source 15% of its energy from renewable sources by 2020. The figure currently stands at around 7%. Heat generated from renewables currently only meets 1% of the UK’s total heat demand.

ALL YOU NEED TO KNOW ABOUT RHI
We give you the lowdown on the £860m Renewable Heat Incentive scheme – what’s included and what’s not.

WHY HAS RHI BEEN INTRODUCED?
The government has set a legally-binding target of reducing greenhouse gas emissions by 34% by 2020 and 80% by 2050 (from base 1990 levels). So the coalition will have to speed up change by toughening legislation such as Part L of the Building Regulations and introducing green initiatives to change behaviours.

One area where it is doing just that is in the take-up of renewable energy. The Feed-In Tariff (FIT) scheme rewards generation of electricity through renewable means. There have been more than 28 500 registrations for solar PV projects since the introduction of the FIT scheme in April 2010.

Now the coalition is looking to do the same for renewable heat. The £860 million RHI scheme is expected to increase green capital investment by £4.5 billion.
The UK target is to source 15% of its energy from renewable sources by 2020. The figure currently stands at around 7%. Heat generated from renewables currently only meets 1% of the UK’s total heat demand. To reach the 2020 renewable energy target, around 12% of the UK’s heat needs to be generated from renewable sources.

HOW DOES IT WORK?
The RHI is being introduced towards the end of 2011 to encourage the use of biomass (wood fuelled) and other renewable heat technologies for non-domestic installations to reduce the UK’s carbon emissions. The first phase of the RHI is targeted at commercial, industrial and domestic community heating projects. Tariffs will be paid to the owner of eligible non-domestic biomass installations at the following rates. Heat must be metered.

HOW DO WE CALCULATE THE ANNUAL RHI PAYMENT?
Let’s assume you have a 150kW biomass boiler operating at a load factor of 30 percent.

The actual peak load hours = 30% x 8,760 hours per year = 2,628 hours
The total annual generation of heat in kWh = 2,628 hrs x 150 kW = 394,200 kWhs
Total Tier 1 kWhs = 1314hr x 150kW = 197,100 kWhs
Tier 1 annual RHI cash = 197,100 kWh x 7.9p/kWh / 100 = £15,571
Tier 2 annual RHI cash = (394,200 – 197,100) kWhs x 2.0p/kWh / 100 = £3,942

Total annual RHI cash payment = £15,571 + £3,942 = £19,513
Average RHI payment = £19,513 x 100 / 394,200kWhs = 4.95 pence / kWh

IS MY BIOMASS HEATING SCHEME GOING TO BE ELIGIBLE?
In order to be eligible, the biomass installation must:

• provide economically justifiable heating that would otherwise be supplied by an alternative form of heating
• be new at time of installation (for the whole plant)
• be used in one location during its lifetime
• use liquid or steam as heat delivery medium
• have been installed and commissioned after 15 July 2009
• be MCS certified, both boiler and installer, for boilers up to 45kW
• be financed without grants or public funding
• include quarterly reporting on the fuel usage to verify sustainable fuel sources