A guide to the Renewable Heat Incentive
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A guide to the Renewable Heat Incentive

09 November 2016 By Steve Sefton, Energy Category Buyer

Biomass boiler

Did you know that organisations can receive financial incentives in return for their investment in renewable energy technologies? One of these is the Renewable Heat Incentive (RHI).

Some of our customers have told us they would like to know more about the RHI and how it works. So we asked our colleagues at Billington Bioenergy to answer a few commonly asked questions regarding the RHI to help keep our customers up to speed.

What is the RHI?

The RHI is a Government scheme that offers financial incentives to organisations who invest in renewable energy technologies or combined heat and power systems to heat their buildings in England, Scotland and Wales.

It does this by paying them for the energy they produce as part of the UK’s effort to reduce carbon emissions from heating and to produce 12 per cent of its heat from renewable sources by 2020.

Why was the RHI introduced?

In order to combat climate change, the UK needs to move away from fossil fuels onto alternative systems for heat and hot water such as heat pumps and solar thermal as well as biofuels, such as biogas or compressed wood pellets.  The RHI incentivises organisations to use these alternative heating methods in preference to systems which burn coal, oil, LPG or gas.

Who is eligible for the RHI scheme?

The RHI is open to any organisation which invests in relevant renewable technologies. The organisation making the application will normally be the owner of the equipment. Public sector organisations, non-profit organisations and businesses can usually apply if their equipment was installed in England, Scotland or Wales on or after 15 July 2009.

How long would my organisation receive the RHI payments for?

The non-Domestic RHI for commercial users provides quarterly payments for renewable heating for a substantial period of up to 20 years. This can make it a very attractive long-term investment.

Taking advantage of the RHI incentives can help to justify the initial investment and can help to speed up the payback period for capital investment. Once the capital cost has been paid back, customers can continue to reap the benefits of the incentives for the rest of the duration.

How much would I receive?

How much you receive depends on the amount of heat generated and payments are made quarterly. For example, from sustainable wood pellet-fuelled heating, you could receive a quarterly payment based on the amount of water and heat you generate and use. You can find the latest tariff levels and tiers here.

Do the tariff levels change?

The government regularly reviews policy regarding RHI and it is therefore important that customers keep up to date. Changes to the RHI can be found here.

How do I apply?

First, check your eligibility, by clicking on the link here. Ofgem have also published an Easy Guide to Eligibility which can be found here.

Then read the Easy Guide to Applying by clicking here which will give you a list of tips with the application process. An online application form is available by visiting https://rhi.ofgem.gov.uk. Paper copies of the application form can be obtained by calling 0300 0032289.

Support in submitting RHI applications can also be procured via YPO’s Solid Fuels Framework.

Can YPO help me to procure renewable technologies?

Absolutely! YPO has EU compliant procurement routes in place for the procurement of many technologies including biomass boilers, CHP systems, solar thermal systems and heat pumps. We can also supply biomass wood chips, pellets and briquettes from suppliers who are registered on the biomass suppliers list, which is a fundamental requirement of claiming the RHI payments.

Thanks to Billington Bioenergy for their input into this blog. Billingtons are one of the suppliers on YPO’s Biomass Fuels framework. To find out details of any of YPO’s energy frameworks, please click here or email [email protected].

More frequently asked questions and answers are also available on the Ofgem website which can be found here.

Categories: Frameworks , Procurement

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