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"Renewable Heat Incentive" Explained

What is the Renewable Heat Incentive?

As well as transforming the sun’s energy into hot water, Solar Thermal technology has the power to earn and save you money.

Under the government-funded Renewable Heat Incentive (RHI), technologies including Solar Thermal Panels will earn payments for every unit of heat generated.

The RHI scheme will be launched in two phases, with payments for Commercial Solar Hot Water systems due to start on the 30th September 2011 and those for Domestic / household Solar Thermal systems to follow in October 2012.

An additional Renewable Heat Incentive (RHI) Premium Payment of £300 is also available to domestic customers from 1st August 2011.

So this means that ANY solar thermal installation that took place from July 2009 to date, will qualify for the RHI, but only from the date it is registered with the scheme once it is launched.

According to the initial planned tariff levels – which will go up in line with inflation – a typical domestic Solar Thermal system will receive 18p per kWh generated. The table below shows some savings and earnings examples.

Fuel Type Annual Saving RHI Payment from Oct 2012 Total Saving from Oct 2012 ROI (%)
Gas £50 £250 £300 7.5
Electricity £80 £250 £330 8.3
Oil £55 £250 £305 7.6
Solid £60 £250 £310 7.8

Based on a typical household with 3 to 5 occupants.
Solar Thermal panels generating 1,400 kWh @ 18p per kWh = £252.
Return on investment based on a system cost of £4,000.

Greater savings/earnings can be achieved where there is
high hot water demand and a larger system is fitted.

Who Qualifies For Renewable Heat Incentives?

Full details of the scheme have not yet been released ahead of the October 2012 launch. However, it is highly likely that RHIs will only be available to homeowners in England, Scotland and Wales. Loft and Cavity Wall Insulation should also be installed, if the property is suitable.

Renewable Heat Incentive (RHI) Criteria

  • Available to private, domestic homeowners
  • Living in England, Scotland and Wales
  • Must have Loft & Cavity Wall Insulation installed
  • Systems to be fitted by approved Solar installers
  • May be necessary to provide feedback on performance

Why install Solar Thermal now?

Can I get a Grant now before the RHI is live in October 2012?

It may be tempting to wait until October 2012 before installing Solar Thermal panels but systems installed before then(from July 2009 onwards) will still qualify for RHIs.

By installing Solar Thermal now, you can start making savings on your hot water bills and help protect the environment. You may also qualify for the RHI Premium Payment which is a grant of £300 available from 1st August 2011.

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