Scottish solar PV installers
Scottish renewable energy installers and electrical engineers

The Renewable Heat Incentive (RHI) Explained

The Renewable Heat Incentive

Please note – the RHI will be dropping on 1st January 2015. Find out more here.

In March 2011, the UK Government announced the details of the Renewable Heat Incentive (RHI). The Renewable Heat Incentive is designed to provide financial support that encourages individuals, communities and businesses to switch from using fossil fuel for heating, to renewable energies such as wood fuel. It is essentially the renewable heat version of the Feed-In Tariff.

Renewable Heat Incentive Tariff

Domestic RHI

Biomass Boilers and Biomass Stoves Solar Thermal
Tariff (per kilowatt hour renewable heat) 12.2p 19.2p

Commercial RHI

The Commercial RHI pays participants of the scheme that generate and use renewable energy to heat their buildings.

The current Commercial RHI Tariffs are shown in the table below:

Tariff Name Eligible Sizes Tariffs (from 01/07/14) Tier
Small commercial biomass Less than 200 kWth 7.6p/kWh Tier 1
2.0p/kWh Tier 2
Medium commercial Biomass 200 kWth to 1MWth 5.1p/kWh Tier 1
2.2p/kWh Tier 2
Large commercial Biomass 1MWth and above 2p/kWh

The two tier mechanism works in that each year the Tier 1 tariff is paid until the system has operated up to 15% of the annual rated output (the equivalent of 1,314 hours at the rated capacity of the installation). Usage after 1314 hours is payable at Tier 2 tariff.

If you run a 199kW boiler for 1,314 running hours per annum, maximising tier 1 Renewable Heat Incentive (RHI) Payments, the boiler will generate approximately £21,964 in year one alone.

Payments are RPI linked and, once you are locked in to the process, guaranteed for 20 years.

Funding for Renewable Energy Installation

There are various sources of funding available for installers of renewable energy technology. The list below is not exhaustive, and competition for funding is fierce so we advise to make inroads into securing funding as soon as possible. Sources of funding vary by region, and the list below is geared towards installers in Scotland due to our area of operation. The list below is only an advisory starting point, it is up to you as an investor to decide on the option that is best for you and therefore AC Gold Energy accept no responsibility for any financial decisions that you may make.

Home Energy Scotland Loan

Loans of up to £2,000 are available for a range of renewable heat and electricity generating technologies – for instance heat pumps, solar, micro-wind turbines or biomass boilers. The loans are time-limited and operate on a first-come first-served basis. Those installing electricity technologies should also be eligible for Feed-in Tariff payments. See Home Renewables Loan Scheme for full details and how to apply.

Home Loans Scheme (Scotland)

If you live in a Universal Home Insulation Scheme (UHIS) area in Scotland you could benefit from an interest free loan of up to £10,000. To find out if you live in a UHIS area please contact your local Energy Saving Scotland advice centre on 0800 512 012

What’s on offer?

Loans of between £500 and £10,000 are available (please note: loans are only available up to a maximum of £4,000 for solar photovoltaic (PV), wind turbines and small scale hydro technologies
Loans are interest free so you only pay back what you borrow
Applicants can pay back the loan in monthly installments over a maximum of eight years.
The loan can be used for the following measures:

  • Loans of between £500 and £10,000 are available (please note: loans are only available up to a maximum of £4,000 for solar photovoltaic (PV), wind turbines and small scale hydro technologies
  • Loans are interest free so you only pay back what you borrow
  • Applicants can pay back the loan in monthly installments over a maximum of eight years.

The loan can be used for the following measures:

See Energy Savings Trust for full details of the scheme and how to apply.

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