UK announces tariff levels for domestic heat pump owners

Households in the UK will soon be eligible to receive hundreds of pounds (£) a year for using heat generated by heat pumps and other renewable heat technologies such as biomass boilers and solar thermal panels. In early July 2013, the UK announced the levels of the long awaited Renewable Heat Incentive tariffs for domestic renewable heat, which will be paid quarterly for 7 years, including extra payments for heat pump metering and monitoring support packages.

The objective of the second phase of Renewable Heat Incentive (RHI), which also includes households for the first time, is to drive forward the uptake of renewable heat technologies in homes across the UK. It aims to cut carbon dioxide emissions, to help meet renewable energy targets and to save money on consumer bills.

Investing for the long term in new renewable heat technologies will mean cleaner energy and cheaper bills. So this package of measures is a big step forward in our drive to get an innovative, renewable heating kit in our homes. Householders can now invest in a range of exciting heating technologies knowing how much the tariff will be for different renewable heat technologies and benefit from the clean green heat produced,” said Energy and Climate Change Minister Greg Barker in an official statement.

Tariff levels and payments

According to the announcement, the tariff levels for heat generation have been set at:

7.3p/kWh (≈8 €ct/kWh) for air source heat pumps;
18.8p/kWh (≈21 €ct/kWh) for ground source heat pumps;
12.2p/kWh (≈14 €ct/kWh) for biomass boilers;
at least 19.2p/kWh (≈22 €ct/kWh) for solar thermal installations.

The tariff levels reflect the expected costs of renewable heat generation over 20 years. Under the scheme, the tariff quarterly payments will be made for 7 years, based on the estimated heat demand of the property. An extra set payment of £230 (€266) per year will be offered to those consumers who take out metering and monitoring support packages for heat pumps and £200 (€231) for biomass boilers.

Who will be eligible?

The RHI scheme will be available for homeowners, private and social landlords, third party owners of heating systems and people who build their own homes. In addition, those households that have invested in renewable heat installations since 15 July 2009 and meet the eligibility criteria will be able to join the scheme. The Department of Energy & Climate Change (DECC) also announced that it still aims to introduce these changes by Spring 2014.

About the Renewable Heat Incentive

The RHI has been operational since 2011 for the non-domestic sector. Following an extensive consultation process on the most suitable financial incentive schemes for renewable heating in households, a decision was made to include the domestic sector in the second phase of RHI.

Previously, households could apply for one-off payment grants under the Renewable Heat Premium Payment (RHPP) scheme, which was introduced as interim support scheme for domestic renewable heat generation and will now be replaced by the RHI.

The final scheme design is subject to State Aid and Parliamentary approval.