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Renewable Heat Incentive (RHI)

The Renewable Heat Incentive (RHI) is the new Government-backed scheme superseding the grants system from the Low Carbon Buildings Programme (LCBP), providing excellent financial pay-back for a wide range of microgeneration heat production technologies. 

Available for domestic, “non-for-profit” and commercial users, the Renewable Heat Incentive (RHI) gives owners of heat-generating technologies, including biomass, air and ground source heat pumps and solar thermal, attractive financial returns on their investment. The RHI is designed to reduce CO2 emissions across the UK and reduce our dependance on traditional fossil fuels, including oil and gas.

The Non-domestic RHI is currently effective and is administrated by Ofgem, with the domestic scheme due to be introduced in spring 2014.  Please refer to the tables below for a list of the non-domestic and proposed domestic tariffs.

Renewable Heat Incentive Tariffs

Non-domestic installations

Heat technology

Tariff (pence per kWh)

Tariff lifetime (years)
Biomass (<200kWh) 8.3p (Tier 1), 2.1p (Tier 2) 20
Biomass (200-1000kWh) 5.1p (Tier 1), 2.1p (Tier 2) 20
Biomass (>1000kWh) 1 20
Ground source heat pump (<100kWh) 4.7 20
Ground source heat pump (>100kWh) 3.4 20
Air source heat pump To be confirmed To be confirmed
Solar thermal 8.9 20

These tariffs are correct as of 1 April 2012.  Please refer to Ofgem's website for up to date tariffs and further information regarding elegibility.

Domestic Installations

Heat technology

Proposed Tariff (pence per kWh)

Tariff lifetime (years)
Biomass  12.2 7
Air source heat pump 7.3 7
Ground source heat pump  18.8 7
Solar thermal  19.2 7

All the Tariffs outlined above are index-linked to inflation to provide a secure means of financial return for the lifetime of the equipment.

From now until spring 2014 all approved installations performed by Radical Energy will qualify for the RHI when it comes into force. Please contact us for more information on how using an eco-friendly boiler can not only save you money but earn you money. 

Renewable Heat Incentive – Worked Examples

A small commercial unit uses 80,000kWh of energy for heating and hot water requirements. To satisfy this demand a medium-sized ground source heat pump is utilised within the curtilage of the property. Not taking into account the cost of the electricity used to run the heat pump, the business would be eligible for a RHI payment of approximately £3750 every year, index-linked to inflation for the next 20 years. This would be payable for the next 20 years. Calculated as follows:
Ground source (<100kWh) non-domestic RHI payment: 80000kWh x 4.7p/100 = £3760
A domestic property with an annual demand of 25,000kWh to satisfy the central heating and hot water requirements, uses a small biomass installation to achieve this. The owner would receive a RHI payment of approximately £3000 every year, index-linked to inflation for the next 7 years.  This does not take into account the cost of wood fuel used. Calculated as follows:
Proposed biomass domestic RHI payment:  25000kWh x 12.2p/100 = £3050