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A quarter of first year renewable heat incentive budget will be spent on homes

Posted by Cathy Debenham on 10 March 2011 at 11:57 am

Up to 25,000 domestic renewable heat installations will be supported by an RHI Premium Payment from July this year, according to today's announcement by DECC (the department for energy and climate change). This is an interim measure until the RHI proper is introduced for homes in October 2012.

Today's announcement brought both good and bad news for homeowners. The fact that more than a quarter of the first year's budget for the scheme will go to households could be read as a marker that the government is serious about the domestic sector.

Countering that is the disappointment that we are still waiting for the detail, and it's likely that domestic installations won't pick up until that is confirmed (May), or maybe not until the premium starts in July.

This is what we know:

  •  The first phase of the renewable heat incentive, which was announced today, covers the big heat users such as the industrial, business and public sectors.
  • The full domestic renewable heat incentive will come into force in October 2012 to coincide with the Green Deal.
  • From July 2011 up to 25,000 domestic installations will be supported by a RHI Premium Payment to help people cover the purchase price of renewable heat systems.
  • People who take this option will be eligible for the full RHI tariff when it starts in October 2012. The budget for this is around £15m.
  • People who had eligible systems installed from 15 July 2009 will also receive the full RHI tariff from October next year.
  • Early adopters, who installed prior to 15 July 2009, won't be eligible.
  • The total budget for the renewable heat incentive scheme is £860m over 4 years.

We don't know:

  • The details of the RHI premium payment, and how it will apply. This will be announced in May.
  • What the full tariff for domestic renewable heat incentive will be. There will be a consultation on this later this year.
  • Which technologies will be included - air source heat pumps have not been included in the first phase, although they are expected to be made eligible in 2012.

The RHI Premium Payment:

  • To be eligible people will need a 'well insulated house'. This will be based on an energy performance certificate. They will also have to agree to give feedback on how the equipment performs.
  • Houses off the gas grid, where heating is more expensive and more carbon emitting, will be a 'key focus'. (What isn't clear is how this links with the insulation criteria above, as many off gas grid houses don't have cavity walls and are difficult and expensive to insulate.)
  • Details of eligible technologies and payment amounts will be announced in May 2011.
  • The Payments will start in July 2011. 
For our reaction to the announcements, click on this press release.

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

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4 comments - read them below or add one

Guardian Systems Ltd

Guardian Systems LtdComment left on: 11 March 2011 at 3:11 pm

Just seems to be "early adopters" are also being penalised. The govt have flaffed around for an age to get to a vague statement. And now having to wait till Oct 2012 for RHI's a disgrace.

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Cathy Debenham

Cathy DebenhamComment left on: 11 March 2011 at 10:52 am

Judy - also see the comment from JTEC on this blog. Linn thinks that solid wall insulation won't be a requirement.

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Cathy Debenham

Cathy DebenhamComment left on: 11 March 2011 at 9:28 am

Hi Judy. Good question. I think that we're going to have to wait and see about insulation levels, and also about what biomass products are included. In the original consultation document, biomass boilers were included and wood pellet stoves weren't. I don't know if the consultation will have changed minds on this point. 

If you do go ahead now, it's important to make sure that the product and installer are both MCS certified, so that they qualify for the RHI. 

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JudyCComment left on: 10 March 2011 at 9:02 pm

I am keen to install biomass, in fact still ready to do so, despite the disappointing vagueness of today's announcement, but my house is Listed.  We have installed quite a lot of insulation where it is practical (walls, loft and floors) , but could not be described as "well-insulated".  

Will  this be taken into account when assessing eligibility for the RH premium payment?

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