The Renewable Heat Incentive (RHI) was a scheme designed to financially reward people who used renewable energy to heat their homes.
The Renewable Heat Incentive (RHI) scheme closed to new applicants on 31 March 2022 but is still running for existing members, while the Boiler Upgrade Scheme (BUS), which launches in May 2022, has taken its place. The RHI was a government scheme intended to help meet the UK’s legally binding target of reaching net zero emissions by 2050. It was aimed at households both off and on the gas grid and ran in England, Scotland and Wales. There were two versions: one for residential homes and one for the non-domestic sector including industrial, commercial, public sector and community organisations. The RHI scheme in Northern Ireland, meanwhile, was closed to new applicants in 2016 but is still running for existing participants.
How did the RHI work?
The Renewable Heat Incentive (RHI) gives financial support to people who used certain renewable technologies to heat their homes. The domestic part of the RHI launched in April 2014 and payments are still being made to existing participants. It was government-funded, by the Department for Business, Energy and Industrial Strategy (BEIS), and aimed to cut carbon emissions and help the UK meet its renewable energy targets by offsetting the cost of installing and running a new heating system. Applications were made through the energy regulator Ofgem. The scheme will shut in 2029 when the last payments are made, to those who applied in March 2022. Find out more about the differences between the green energy suppliers, and which one is best for you
How did Renewable Heat Incentive (RHI) payments work?
RHI participants receive a quarterly tariff payment for every kilowatt hour (kWh) of renewable heat they produce. These payments continue for seven years. It was also possible for households to install more than one technology and receive payments for each system they used when the scheme was running. The amount participants are paid per kWh of heat is dependent on the renewable technology they installed, when they applied to receive RHI, and their home’s Energy Performance Certificate (EPC) rating. If you’re already part of the scheme and you continue to meet your ongoing obligations, you’ll continue to receive payments until the end of your seven-year membership.
Which technologies were eligible for RHI?
Air-source heat pumps, ground-source heat pumps, biomass boilers and solar water heating were all eligible to receive Renewable Heat Incentive payments. Find out more about renewable heat technologies – including how to determine whether your home is suitable to install any of them – in our dedicated guides: Air source heat pumps Ground source heat pumps Solar water heating
What’s the difference between the Feed-in Tariff, Smart Export Guarantee and Renewable Heat Incentive?
The Feed-in Tariff (FIT) made cash payments to households which generated and exported renewable electricity. RHI payments are meant to help offset the cost of installing and running a renewable heating system, rather than providing an income in return for the renewable electricity households put into the grid. The schemes rewarded different renewable technologies: The RHI is for renewable heating systems, such as heat pumps, biomass boilers and solar water heating The FIT was for renewable electricity systems, such as solar panels and wind turbines. The FIT closed to new applicants in 2019. The Smart Export Guarantee (SEG) replaces it. The SEG pays households for excess renewable electricity they generate and export to the national grid. But, unlike the FIT, the SEG doesn’t reward you for generating electricity that you don’t export. Find out more about the Smart Export Guarantee.
How do the Renewable Heat Incentive and Boiler Upgrade Scheme differ?
The RHI was a government financial incentive to promote the use of renewable heat with payments across seven years. The Boiler Upgrade Scheme (BUS) is a government-led programme designed to aid the decarbonisation of buildings by providing one-off grants to support the installation of heat pumps, and biomass boilers in some circumstances. The BUS will launch in May 2022. It will give applicants an up-front sum of up to £5,000 for air source pumps and £6,000 for ground source heat pumps in place of the £7,000 paid in quarterly instalments over seven years that the RHI provided. The new initiative will run for three years, and the government has set aside a budget of £450 million to roll it out. To apply for the BUS, your installation must have been commissioned on or after 1 April 2022.
Ensure that renewable heating is suitable for your home before you start. Read our guides to air source heat pumps, ground source heat pumps, biomass boilers and stoves, and solar water heating. It’s also worthwhile to make sure your home is well insulated and energy efficient before you look to install renewable heating. Applications for the BUS need to be submitted through the heating system installer you commission to conduct the works in your home. Installers can download a voucher application form on Ofgem’s website and submit it back to the energy regulator via email.
Once the regulator has received the form from the heating system installer, the property owner will be emailed by Ofgem asking for their consent to take part in the scheme. When this has been done, installers will be notified of the outcome over email. After your low-carbon heating system has been fitted, your installer must email Ofgem with the evidence required for your voucher redemption, including the MCS certificate number.