Explaining the Renewable Heat Incentive

Times have been tough for UK businesses in recent years as the recession has bitten and the British weather has played havoc.  There is the prospect of help from a surprising source. The Government committed the UK to binding EU legislation that requires the United Kingdom to produce 15% of its energy needs by 2020 from renewable sources. Government policy is changing attitudes and is now significantly biased to renewable heating through the Renewable Heat Incentive (RHI).

RHI Basics

The RHI pays a tariff for every kilowatt hour (kW/h) of heat (and hot water) you produce. It has been structured in a way that provides a genuine financial incentive to make the move. Through the RHI, Ofgem (who administer the scheme) will pay a tariff based on the type of renewable heating technology you install, its capacity and the number of hours that you heat your premises. Importantly, the tariff level is index linked over the twenty years of its life.

The Non-Domestic RHI

Commercial installations qualify for the Non-Domestic RHI. This pays quarterly payments, based on the amount of energy used per kWh, for a period of twenty years. This results in the technology paying for itself in an average of 5-8 years and the remaining payments turning into a return on your modern energy investment. The amount received per kWh is dependent on the technology installed, currently the tariffs are as follows: