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Renewable Heat Incentive: 'deeming' explained

Posted by Linn Rafferty on 22 June 2010 at 10:53 am

In the proposed Renewable Heat Incentive (RHI), the calculation of how much will be paid for renewable heat production depends on the installation type, as follows:

  • Small scale installation, such as in a home: each installation's entitlement is calculated by multiplying the payment per kWh by the number of kWhs per year that the property is ‘deemed’ to require, to cover its space heating and hot water needs
  • Medium scale installation: the same ‘deeming’ approach applies, except that solid biomass installations have the option of metering the heat they produce; if the meter shows a higher usage than the deemed amount, the extra will be paid for at a lower rate;
  • Large scale installations, process heat, biomethane injection and district heating: the payment is always made on the basis of the metered heat used.

Small scale installation will be of most interest to YouGen readers, so this blog will give some insight into two questons:

1. What is meant by ‘deeming’?

Put simply, deeming is a method by which a dwelling's heat requirement is estimated. Instead of metering the amount of heat produced by a domestic renewable heat installation, the hot water and space heating needs are estimated using BREDEM (the Building Research Establishment Domestic Energy Model) more about this later.

2. Why is it needed?

There are three reasons:

a. Unlike gas and electricity meters, we don’t currently have accurate meters capable of measuring the amount of heat produced by an installation. Where they are available, they are expensive, and in a domestic installation they would form a disproportionate part of the total cost of the installation. Also, heat meters are not currently regulated in the UK, so there is no legal requirement for them to be approved or verified prior to being used. This isn’t considered acceptable for domestic use.

b. The payment is designed to be higher than the cost of the fuel producing the heat. So, if a payment were to be made for each kWh produced, there would be a perverse incentive to waste heat by producing more than the home actually needed. This waste heat could be ‘dumped’ in a number of ways - opening windows, or running the hot water to waste, or leaving the heating on when the house was empty.

c. There also needs to be some incentive to install energy efficiency measures. The deemed requirement is assessed for the dwelling, assuming that it already has reasonable energy efficiency measures. If the home doesn’t have those measures, it is likely to use more heat than the deemed requirement. The extra heat wouldn’t attract the payment, so this provides an incentive to install those measures and reduce the cost to the householder of the fuel used.

My next blog will cover BREDEM, which is the basis of the SAP energy performance rating used to create Energy Performance Certificates (EPCs) for homes.  I will explain why it is an excellent method for deeming the heat requirement for a home, so that the Renewable Heat Incentive may be paid without requiring an expensive heat meter to be installed.

Photo: bonus1up

About the author: @linniR is a consultant, a freelance writer and a Domestic Energy Assessor accredited with the NHER scheme, and she enjoys all three.  She tweets regularly on issues relating to energy efficiency and renewables and provides consultancy, especially in relation to training needs.

If you have a question about anything in the above blog, please ask it in the comments section below.

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