The Heat Revolution

By `Lanre Okanlawon

It’s nearly here. The much awaited Renewable Heat Incentive!

After so many months of speculations, official papers have been released for the cash incentive scheme to “reward” households who key into the use of eligible “green technologies” for heating. The RHI will be in place to reward households who meet their space heating and/or hot water needs by using new and renewable energy technologies such as heat pumps (air source and ground source), biomass and solar thermal panels. At the moment, more than 1.5 million UK households use boilers and a recent poll suggests that at least one in every five household plans to replace their existing boiler.

The latest Government announcement indicates that the scheme will commence in summer 2013 and the subsidy payments will be paid over a period of 7 years. The rates are 6.9p-11.5p for air source heat pumps, 12.5p-17.3p for ground source heat pumps, 5.2p-8.7p for biomass boilers and 17.3p for solar thermal panels. These will be paid per estimated units of power generation in kilowatt hours (kWh).

For a house that has an air source heat pump (9kW) that costs about £8,000 to install, the owner will receive roughly £880 yearly in RHI payments for seven years, in addition to a continuous annual savings of about £390. This means the initial installation costs will be realized in about ten years!