The RHI scheme is a world first: a financial incentive scheme for renewable heat generation. This is a ground-breaking scheme that will help the UK reduce carbon emissions and hit its EU renewable energy targets.
The Department of Energy and Climate Change (DECC) is responsible for the policy and regulations underpinning the scheme, whilst the Office of Gas and Electricity Markets (OFGEM) is responsible for developing and administering the scheme.
The RHI scheme supports a number of different forms of heat generation, including biomass heating – so wood chip boilers, wood pellet boilers and log boilers all qualify for RHI income.
The Non-Domestic RHI provides financial support for renewable heat technologies for the lifetime of the installation (for 20 years). Ofgem make payments on a quarterly basis. Once you are accredited, a tariff level will be assigned to your installation based on its technology (eg biomass, heat pump, solar) and size. Payments will be made based on the actual heat output of the system.
Payments begin to accrue from the date of accreditation of the installation. The date is confirmed in the accreditation confirmation letter emailed to successful applicants.
How payments are calculated
You are paid a certain amount per kilowatt hour (kWhth) and calculations are made according to whether your system is designated “simple” or “complex”, or for applications submitted from 24 September 2013, 'standard' or 'multiple'.
For a simple system
Payments are calculated by multiplying the appropriate tariff by the amount of eligible heat generated in the relevant quarterly period. The formula is:
Payment = Tariff level × Heat generated by RHI installation
For a complex system
Once you have entered the meter readings and the three heat data figures required by the IT system on the Non-Domestic RHI Register, the ‘Eligible Heat Output’ (EHO) figure in kWhth wil be calculated and displayed. This is the amount that will be multiplied by your tariff to determine the payment amount.
The formula to determine how many kWh have been produced is:
Eligible heat used on system × Heat generated by RHI Installation
/ Total heat generated on system