Farm Diversification

The Renewable Heat Incentive is a Government scheme that provides financial support to for the generation of renewable heat and production of biomethane.
The scheme is designed to drive a significant increase in the level of renewable heat produced in the UK. It will help kick start the deployment of low carbon heating technologies by providing a financial incentive to install renewable heating in place of fossil fuels.

The RHI provides an excellent diversification opportunity to farms and estates, particularly those with a large heat demand such as poultry sheds, or a cluster of buildings requiring heat. Switching to a renewable heat source will generate income from the RHI tariff payments, and may significantly reduce fuel costs, particularly if you are switching from oil or LPG.

It is vital that the renewable heating technology selected is carefully matched to the nature and scale of heat demand on the farm, and that the pros and cons of the various technologies are fully understood.
RHI Domestic Scheme and the Non-Domestic Scheme

The non-domestic RHI opened at the end of November 2011.  An RHI for domestic premises is due to open at the end of 2012.

The domestic scheme will be open to single, domestic premises.  This is defined by Council Tax banding.  For example, if you have a farmhouse with a farm office and only pay Council Tax on this building, it will fall into the domestic RHI scheme.
The non-domestic scheme is for renewable heat installations that are heating anything other than a single domestic premises.  For example, a renewable heating installation for the farmhouse and an adjacent cottage would be eligible for the non-domestic scheme.

How the scheme works

• The RHI makes a tariff payment for every kWh of heat produced for 20 years, and is adjusted annually in line with inflation.
• Heat use is measured using heat meters.  Depending on the number of buildings on the heating system, several heat metres may be needed. 
• Payments are made quarterly, based on meter readings which the equipment owner inputs into the Ofgem website.
• RHI payments are claimed by and made to the owner of the installation.
• RHI cannot be claimed in addition to a grant for installation. The tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems.

Eligibility

Ofgem, who administer the RHI, have produced detailed guidance documents on the eligibility criteria for the scheme.  In summary the major eligibility criteria are as follows:

Technologies
The technologies and fuels eligible for RHI are:

• Solid biomass (including woodchips, pellets, logs and straw);
• Gaseous biomass;
• Solar thermal;
• Ground and water source heat pumps;
• On site biogas;
• Deep geothermal;
• Energy from waste;
• Injection of biomethane into the grid.

Geographical Coverage
The scheme will cover England, Wales and Scotland.

Certification of Installations
For installations up to and including 45 kWth, both installers and equipment will need to be certified under the Microgeneration Certification Scheme (MCS) or equivalent standard. The scheme is an independent, industry led certification process. It assesses installation companies and products against robust standards. Its purpose is to assure the quality, durability and energy generation of products. More information on the MCS can be found here.
Installations over 45kWth do not require any certification.

Existing Installations
Installations installed and first commissioned on or after the 15th July 2009 will be eligible for support, providing they meet the final eligibility criteria. If you received a grant for your installation, then you will be given the option to pay back your grant and instead receive support under the RHI. It is not possible to claim RHI and have a grant for installation.
Use of the Heat

Eligible loads are space heating, hot water and process loads.  The heat use must be in a wholly enclosed structure.  Heat must be supplied to meet an economically justifiable heat load, not purely created to claim RHI.  It must also be heating a permanent structure, and as such polytunnels are unlikely to be considered eligible.

Tariff Rates
Tariff rates vary depending on the technology and size of the plant:

Tariff name	Eligible technology	Eligible sizes	Tariff rate (pence/kWh)	Support calculation
Small biomass	Solid biomass; Municipal Solid Waste (incl. CHP)	Less than 200 kWth	Tier 1: 7.9	Tier 1 applies annually up to the Tier Break, Tier 2 above the Tier Break. The Tier Break is: installed capacity x 1,314 peak load hours, i.e.:kWth x 1,314
			Tier 2: 2.0
Medium biomass		≥ 200 kWth & <1,000 kWth	Tier 1: 4.9
			Tier 2: 2.0
Large biomass		≥1,000 kWth	1.0	Metering
Small ground source	Ground-source heat pumps; Water-source heat pumps; deep geothermal	< 100 kWth	4.5	Metering
Large ground source		≥ 100 kWth	3.2
Solar thermal	Solar thermal	< 200 kWth	8.5	Metering
Biomethane	Biomethane injection and biogas combustion, except from landfill gas	Biomethane all scales, biogas combustion <200 kWth	6.8	Metering

 Notes: kWh stands for kilowatt hours (used in relation to heat output) and kWth stands for kilowatt thermal (used in relation to equipment capacity).

How to Apply

Ofgem are responsible for administering the scheme and applications are made through their website. It is highly recommended that you familiarise yourself with the detailed guidance documents. It should be noted that you cannot apply for RHI accreditation until the boiler is installed. For installations over 200kW pre-approval is possible. A range of information is required for the application in order to prove eligibility and compliance with the scheme rules.

Further Information

A range of useful information on the RHI can be found on the Ofgem website, including:

• The Renewable Heat Incentive – Financial support for renewable heat technologies (Ofgem Information Leaflet)
• Renewable Heat Incentive Frequently Asked Questions
• Renewable Heat Incentive Guidance Volume One
• Renewable Heat Incentive Guidance Volume Two