The new Domestic Renewable Heat Incentive (d-RHI) scheme pays households for the heating and/or hot water they supply themselves with new renewable heating systems.¹ It is designed to make renewable home heating – such as solar hot water, wood fuel heating and heat pumps – affordable for the UK’s three million homes off the gas grid. On-grid homes are also eligible for the scheme. 

“DECC, Ofgem and industry have been working for years on the Domestic RHI, and its launch today is a major milestone for the Government’s green policy record,” said Dr Nina Skorupska,  chief executive of REA, the Renewable Energy Association. “Households off the gas grid now have a financially attractive clean energy alternative to oil and electric heating. Already over half a million people have installed solar power in their homes to cut their costs and carbon emissions. Now millions more can do the same with solar hot water, wood fuel heating and heat pumps.”

The REA and the affiliated Solar Trade Association have both worked closely with DECC on the detail of the scheme. The REA’s subsidiary company Renewable Energy Assurance Ltd (REAL) operates the Renewable Energy Consumer Code (RECC), which aims to guarantee a high-quality experience for consumers considering renewable energy for their homes. The RECC team are now working hard to make sure customers have the information they need to choose a good value renewable heating system that meets their needs. Note: Only systems installed by companies registered with RECC and the Microgeneration Certification Scheme (MCS) will be eligible for RHI payments.

“These technologies can improve people’s lives as well as the environment, but they are also complicated and unfamiliar to many,” said Virginia Graham, REAL chief executive. “Customers must do their research into the technologies, their local installers and the d-RHI scheme details to ensure that renewable heating is right for them. Getting quotes from at least three MCS-registered installers is essential to ensure you get the best installation for your home at the best value for your budget.” 

Avoiding energy waste by implementing energy efficiency measures should be a priority for anyone looking to reduce their energy bills and their carbon footprint. Renewable heating systems also perform best in a well-insulated property. The Government therefore requires customers to undergo a Green Deal Assessment in order to register for the d-RHI. If the Assessment recommends loft or cavity wall insulation, these measures must be installed with or before the renewable heating system in order to register for the d-RHI. Customers can find a Green Deal Assessor on the Green Deal Oversight and Registration Body (GD-ORB) register. GD-ORB is operated jointly by Gemserv and REAL.

Industry feedback

The arrival of the Domestic Renewable Heat Incentive was welcomed news to the industry. “With the launch of the Domestic Renewable Heat Incentive the final piece of support for household solar technologies slots into place,” said Paul Barwell, chief executive of the STA. “Together with the Green Deal for insulation improvements and the Feed-in Tariff for solar power, householders now have a great choice of Government-backed financial incentives to choose from to best suit their clean energy needs.” 

The STA’s evidence on the potential for cost reductions in solar thermal were a key factor in the final support levels. Industry expects the Domestic RHI to trigger healthy growth in the solar hot water market. Note: All roofs except North-facing units are suitable for solar thermal, and the technology requires a relatively modest amount of roof space. A typical system for a four bed home would cost around £4,500. The STA is keen to expand the scheme to include other solar technologies such as hybrid PV-T panels and solar space heating.

Together with solar thermal, the STA and the Government are targeting over one million solar roofs in 2015. Over 200,000 solar thermal systems are already installed in the UK. Global capacity for solar thermal is over 200GW — around double global installed capacity of solar power. The technology is proven and well established across Europe and elsewhere.

 Mark McManus, Managing Director of Stiebel Eltron UK, a leading manufacturer of renewable technologies, agreed. Not only does he believe that the domestic RHI will encourage many more homeowners, private landlords and self-builders to harness green technologies such as air and ground-source heat pumps and solar thermal because of the incentives available, but that the initiative has the potential to transform the uptake of renewable technologies in the UK.

“We have seen the success of the commercial RHI, so the introduction of the domestic RHI is a natural next step on the road towards meeting the UK’s carbon reduction targets,” McManus added. “The scheme allows households which have already installed eligible renewable technologies to receive the subsidy payments, but it will now make the uptake of such technologies particularly appealing to those with properties off the gas grid reliant on oil or electricity for heating.”

1. Technologies eligible for the domestic RHI include solar thermal systems that provide hot water, ground-source heat pumps drawing heat from the warmth underground and air source heat pumps taking heat from the air outside. Biomass boilers burning wood pellets are also eligible.