28 Jul 2015

RHI tariff update

28

Changes to the Domestic Renewable Heat Incentive tariff means that payments for biomass boilers and stoves have decreased for new applications.

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The Domestic Renewable Heat Incentive (RHI) is a Government incentive to promote the use of renewable heat. People who join the scheme and stick to its rules receive quarterly payments over seven years for using clean, green renewable heat.

The original RHI tariffs were set by the Department of Energy and Climate Change. They have to keep the RHI within budget and they do this by lowering the tariff rates for new applicants. This is called ‘degression’ and it happens if uptake of the scheme is higher than the approved budget. Tariffs are subject to review every quarter, but the tariff rate will only reduce if the total amount of payments made is higher than the degression trigger or super-trigger.

Last month the Domestic RHI tariff for biomass boilers and stoves was decreased from 8.93p to 7.14p per kilowatt hour for all new applications. The tariffs for air source heat pumps, ground source heat pumps and solar thermal have not been affected by this degression.

Once someone joins the Domestic RHI, they will stay on the same tariff rate for the full seven years of membership. A tariff reduction only affects people who are applying after the degression date. Therefore, if you submit a complete application before the reduction takes place you will not be affected if your application is successful. Your tariff is based on the application submission date. This means that if your application is still being reviewed when degression comes into effect, you won’t lose out. As a consequence, homeowners are urged to act now before the next reduction – due in September.

Easing installation

Oliver Thyne, Director of renewable energy expert Green Square Kelso, comments:

“It is a good idea to get ahead of the game when it comes to making the switch to renewable energy. With the RHI tariff periodically reducing, now is the time to act. Waiting until the winter months could mean risking a period of transition without heating and hot water and a potentially longer waiting time for installation due to extra demand. The peace of mind that comes with having your heating and water system in place and pristine as you head into the winter months is priceless, and the process at this time of year is smoother and stress free.”

Regardless of the fall in funding, with fuel prices continuing to rise and consumer demand for heat efficient products soaring, it is no surprise that a new trend is emerging where biomass stoves and boilers are becoming home heating products of choice. The switch to an environmentally friendly and cheaper renewable energy alternative is often the obvious choice when it comes to installing a new heating and hot water system.

The process of installation in the warmer months presents less disruption to the property due to better conditions. With the heating system out of use and with more day light hours, the fit can be completed with ease and over a shorter period of time.

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