Renewable Heat Incentive (RHI)

Financial encouragement to install renewable heating systems

Heat is the biggest use of energy in the UK. Just under half of the UK’s CO2 emissions and 60% of domestic energy bills are used for heating space and water. Heat in the UK is currently supplied predominantly by fossil fuels – with less than 1% from renewable sources.The renewable heat incentive (RHI) aims to change that. Its aim is that 12% of heat is generated by renewable sources by 2020. A total budget of £860m was available for the renewable heat premium payment over the period 2011 – 2014 and is now being extended to 2020.

 There are 3 main requirements for claimant householders and landlords:

  • A minimum of 250mm of loft cavity installed where appropriate
  • Cavity wall insulation (where appropriate) as recommended in the assessment.
  • An MCS approved installed system                                                      IMG_0019

MAY 2018:                   

All new applications for heat pumps to the Domestic
RHI scheme will be required to have electricity
metering arrangements installed alongside their
heating system.

New MMSP registrations on or after 22 May 2018 will
be able to get a lump sum payment alongside their
first Domestic RHI payment, and a maximum of up
to seven years of quarterly MMSP payments.
1) If you successfully registered for MMSP
before 22 May 2018, you’ll receive:
 £230 per year (£57.50 every three months)
for heat pumpsIMG_0081
 £200 per year (£50 every three months) for
biomass pellet boilers
2) If you successfully registered for MMSP on
or after 22 May 2018, you’ll receive:
 a single lump sum payment of £805, and
MMSP payments of £115 per year (£28.75
every three months) for heat pumps
 a single lump sum payment of £700,and
MMSP payments of £100 per year (£25.00
every three months) for biomass pellet

Installer and Product must be MCS certified (or equivalent – more details still to be published on what this means) and meet relevant required standards. Installers must be members of the Renewable Energy Consumer Code (RECC).

Payments will be made quarterly to householders over seven years for each kWh of heat produced for the expected lifetime of the renewable technology and based on deemed heat usage. Any money received upfront from the RHPP will be deducted from the RHI payments.

The domestic RHI has been designed as a ‘boiler replacement scheme’. As such, the payments are intended to bridge the costs between the installation and running costs of fossil fuel heating systems and the renewable alternatives. Unlike the feed-in tariff it isn’t talking in terms of investment, or payback (do you expect a gas or oil boiler to ‘payback’?).



As running costs of heating are more expensive off the gas grid, and also emits more carbon dioxide, DECC has prioritised this sector, by setting tariff levels that provide a better return for householders living off the gas grid.

A digression scheme, similar to the one introduced for the Feed-in Tariffs scheme, will be put in place to manage the RHI budget. This means that tariff levels will decrease by a set percentage once specified levels of deployment have been reached.