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Renewable Heat Incentive in Practice

The sun is set to shine on homeowners who install heat-generating renewables. Tim Pullen explains.

For those that have not been keeping up, the RHI is similar to Feed-in Tariffs in that it is a quarterly payment from the Government for every unit (kWh) of heat energy produced from a renewable source and it applies at different rates to heat pumps, biomass boilers and solar thermal.

It is only the renewable element that’s paid for. So, for a wood pellet boiler (biomass) producing 20,000kWh of heat, the owner will be paid for 20,000kWh. For a heat pump producing 20,000kWh, the owner will be paid for 20,000kWh less the electrical input.

We’ve worked up some examples of how it might work in certain situations.

How it works

Total Benefit of RHI Over Seven Years for Three Example Houses
  The Standard The Eco The Barn
Size 200m² 200m² 350m²
Build Standard Building Regulation Code for Sustainable Homes Level 4 some effort to reduce energy consumption with constraints imposed by a stone barn
Occupants 4 4 5
Space Heating Demand 11,000kWh 7,000kWh 15,000kWh
Domestic Hot Water (DHW) Demand Per Year 4,000kWh 4,000kWh 5,000kWh
Running Cost on Oil Per Year £1,000 £830 £830
Heating Systems Installed
  • 4m² solar thermal array
  • Ground-source heat pump
  • 4m² solar thermal array
  • Air-source heat pump
  • Wood pellet boiler (biomass)
Total Capital Cost £12-14,000 £6-7,000 £10-15,000
RHI Returns
  • Solar thermal (1,800kWh x 19.2p x 7 years) = £2,419.20
  • Solar thermal (1,800kWh x 19.2p x 7 years) = £2,419.20
  • Biomass boiler (20,000kWh x 12.2p x 7 years) = £17,080
 
  • Ground-source heat pump (9,726kWh* x 18.8p x 7 years) = £12,799.42
  • Air-source heat pump (6,325kWh* x 7.3p x 7 years) = £3,232.07
 
Running Cost on Renewable System for Heating and DHW x 7 Years £4,480 £3,185 £4,270
Total Benefit over 7 Years £19,698.62 £8,836.27 £21,350

*  value after Coefficient of Performance (CoP) is factored in. For more information on CoP read Heat Pumps: A Guide

Our Conclusion: It Makes Good Sense

The RHI gives a return that broadly pays for a system in seven years. In all cases, running costs are lower than the fossil-fuelled alternative.

It’s important to remember too that gas and oil boilers tend to have a life of 10 to 12 years, but heat pumps and biomass boilers tend to last 20 years or more — solar panels, 30 years plus. So for at least 13 years, the owner is ‘in profit’ with a system that has, by then, cost nothing (potential maintenance costs aside).

The rates announced may not be as good or for not as long as we had hoped, but they are better than we were beginning to believe, and good enough to ensure that installing renewable heating systems makes good financial (as well as ecological) sense — and that it is a sensible option for anyone building or renovating.

Main image by Oliver Dixon.