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I've got RHPP - is it worth applying for RHI?

Posted by Cathy Debenham on 11 October 2013 at 10:07 am

Q: I am trying to calculate whether it is going to be worth us applying for RHI (renewable heat incentive) since we have already obtained RHPP (renewable heat premium payment). Am I right in thinking that those with a high efficiency construction, requiring a smaller boiler, will we get less than a less efficient building? If the returns are going to be small, based on our efficiency, plus the repayment of RHPP,  then will it be worth it? 

Can you please repeat how to calculate the expected returns? Not sure how to do the maths.

A: The RHI is calculated on the heat demand for your home, as measured by an Energy Performance Certificate (EPC). If you have a look at the bottom of your EPC document you'll find a table giving figures for the space heating and water heating requirements for your property with a figure for each in kWh per year. If your boiler serves the demand for both, add them together. The resulting figure is the sum on which your RHI will be paid. 

For example; mine are as follows: 

Space heating: 15,183, water heating 2,806; total 17,989 (I'm going to use 18,000 for ease of calculation in this example).

If I were to install a biomass boiler I would get 12.2p per kWh, per year, for 7 years.

18,000 x 0.122 = £2,196 per year x 7 = £15,372 over the life of the tariff

Then subtract the RHPP payment (£2,000 if you installed since 1 April, less if you installed before that) = £13,372.

Because your house is highly energy efficient, the heat demand will be smaller and so you will have a smaler boiler, costing less to install. The RHI is designed to compensate you for the additional costs of renewable heating over oil heating. Because you will have paid out less in upfront costs and ongoing fuel costs, the incentive payments you get will be lower.

However, it's definitely worth doing the sums, and I suspect you will find that it's worth while applying. The subtraction of the RHPP payments will be spread evenly over the seven year life of the tariff.

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