Good news for the RHI following the Government’s Spending Review

There has been a fair amount of speculation on the future of the Renewable Heat Incentive (RHI) over recent months, so many were pleased when Government confirmed that they are committed to the RHI until at least 2021.

The outcome of the recent Spending Review was a positive move with the Government continuing to fund the RHI as an incentive for homeowners, with the aim of encouraging many to opt for an efficient and eco-friendly way to heat their home.

This announcement is great news for anyone currently looking to install a renewable technology such as a heat pump, solar thermal, or biomass, in their home as they can apply for funding with certainty that the scheme will continue to run. The RHI offers a tangible benefit with the tariffs helping to offset the cost of system installation

The continuation of the RHI is also good news for installers. By backing such an appealing incentive we can expect the interest in renewable solutions to grow, bringing more work of this type to installers across the country.

 

Useful resources

You can find out a bit more about heat pumps and solar thermal through our list of useful resources:

» Heat pump selector tool
» Ground source heat pumps
» Air source heat pumps

Nu-Heat also offers a range of MCS support packages for installers, ensuring any plumbing & heating engineer is able to install a renewable system that complies with strict MCS guidelines, qualifying for the RHI. Call us on 01404 540650 for more info.

 

RHI tariffs

When opting for a ground source heat pump (GSHP), you could receive around £15,000 back in tariff payments over the 7 years period thanks to the RHI.

Current RHI tariff rates (December 2015)

RHI PAYMENTS
GSHP
ASHP
SOLAR THERMAL
RHI Tariff payment
pence / kWh
19.1
7.42
19.51
Possible RHI payments over 7 years using Nu-Heat renewable technologies*
£14,154
£4,907
£1,540
*An average two-bedroomed house, using 15,000kWh of heating per year with a SPF of 3.4 on GSHP and 2.7 on ASHP.
Solar thermal based on average 3-bedroomed, 4-person household using 49,640 litres of hot water p.a.
May 2014.

Does a heat pump need planning permission?

Many properties will be suitable for a heat pump but it is often the plot that dictates which type of heat pump would be best suited.

Generally, to see a significant saving, a heat pump is best suited to a property that does not have any access to mains gas, as these are the properties that have the potential to benefit the most from renewables. But does the plot itself have a part to play?

Heat pump siting

Ground or air source heat pump?

A ground source heat pump (GSHP) needs space for the ground loops – the available land needs to be at least two and a half times larger than the entire floor area of the property. There also needs to be space for a plant room to hold the heat pump and cylinder. Because of this, only larger properties or those in a rural location are generally suited to a GSHP. The alternative is to drill a series of vertical boreholes that will carry the ground collector pipe.

Air source heat pumps (ASHP), on the other hand, are suitable for a wide range of property sizes and require little space. The heat pump unit sits outside and because there’s no need to dig trenches for ground loops, it is a lot quicker and easier to install. Apart from building a plinth there are no groundworks needed. This is a good option for anyone on a tight build schedule and also a smaller budget.

What about planning permission?

Permitted Development Rights permits some limited minor changes to a property without the homeowner needing to apply for planning permission.

Typically, a GSHP installation will fall under Permitted Development because the heat pump will be out of site, within a plant room. However, if the unit is being installed in a listed building or within an area of conservation then it would be worth checking the specific rules and regulations with your local council.

A large percentage of ASHP installations will also fall under Permitted Development, but the fact that ASHPs do generate some noise means that their location can be an issue, sometimes requiring Planning Permission. This ought to be checked before going ahead with the installation, just in case permission is needed beforehand.

An ASHP installation must either be classified as Permitted Development or receive Planning Permission and, to achieve Permitted Development the ASHP installation must comply with certain standards.

For more information on Permitted Development and the potential need for Planning Permission, download our information sheet.

A financial incentive

The Renewable Heat Incentive (RHI) aims to offer a real incentive to install renewable technologies, such as heat pumps, to heat homes. The scheme offers quarterly payments to homeowners over a period of 7 years, based on estimates of a household’s annual heating consumption.

In order to qualify for the RHI payments, the property and renewables system has to meet certain criteria:

  • The product itself, whether it’s a heat pump or a solar thermal system, must be MCS approved
  • The installation of the system must adhere to strict guidelines

For more information on the criteria put in place and whether the property and system are eligible for the RHI, we recommend you contact Ofgem.

You can use Nu-Heat’s heat pump selector tool to determine if a heat pump is suitable for your project.

What is the Renewable Heat Incentive?

The Domestic Renewable Heat Incentive (RHI) is a government financial incentive that promotes the use of renewable technologies, such as heat pumps or solar thermal. Eligible applicants receive quarterly payments for seven years based on the amount of clean, green renewable heat their system produces.

Since its launch in April 2014, more than 25,000 renewable heating systems have been successfully installed. And it’s estimated that 1366kT of CO₂ will be saved across the lifetime of the scheme by those accredited in the first 10 months. That’s the equivalent of 6807 journeys to the moon and back!

The scheme is specifically targeted at, but not limited to, homes off the gas grid, as these are the properties that have the potential to benefit the most from renewables.

In a property with no access to the gas grid the savings are obvious. A property with an electric boiler feeding radiators would cost approximately double the amount to run each year than a heat pump with a typical Coefficient of Performance (CoP)*. The heat pump also needs electricity to run but far less than a radiator system as its efficiency is much greater.

Heat pumps and the RHI

Heat pumps are ideal off-grid solutions that are eligible for the RHI and offer decent payback tariffs. There are two main types of heat pump, ground source (GSHP) and air source (ASHP), with a wide range of options available in terms of heat output:

  • ASHPs are an affordable option and suitable for properties with less outside space. The unit sits outside the property with the cylinder, buffer tank and associated control equipment fitted inside.
  • GSHPs, on the other hand, are fitted indoors with the ground loops or boreholes placed in the ground outside. GSHPs need more space both for the unit inside the property and for the ground loops externally and they are also more expensive to purchase and install, given the groundwork requirement, but the RHI tariff level is set at a higher level to reflect this.

 

RHI PAYMENTS
GROUND SOURCE
AIR SOURCE
SOLAR THERMAL
RHI Tariff payment
pence / kWh
19.1
7.42
19.51
Possible RHI payments over 7 years using Nu‑Heat renewable technologies*
£14,154
£4,907
£1,540
An average two-bedroomed house, using 15,000kWh of heating per year with a SPF of 3.4 on GSHP and 2.7 on ASHP.
Solar thermal based on average 3-bedroomed, 4-person household using 49,640 litres of hot water p.a.
May 2014.

 

Installation and the RHI

In order to be eligible for payments, the chosen renewable system and the installer/commissioning engineer must be MCS approved – which is something that Nu-Heat can help both homeowners and installers with. The legislation aims to ensure that all renewables systems are installed to the highest standard and operate efficiently.

*CoP – Coefficiency of Performance: the measure used to display heat pump efficiency
In a well-insulated property every single kilowatt of electricity used to power the heat pump can provide up to three kilowatts of free energy. This ratio is known as the CoP.

For more information on heat pumps and the RHI give us a call on 01404 540650.