The Renewable Heat Incentive (RHI)

The UK Government’s RHI scheme is the first of its kind in the world and is now a major reason to use biomass heating technology for all types of non-domestic building – both small-scale domestic or larger scale, commercial.

The RHI is a fixed, index-linked income for every unit of heat you generate over a 20 year period, protected and guaranteed by primary legislation. Additional to this Government subsidized income there are also the cost savings on the heat generated by the biomass boiler and the wood fuel used, compared against the existing fossil fuel derived sources, such as oil, gas or LPG.

The level of tariff is set from the date of registration, so to maximise the level of 20 year fixed tariff available to your project, you need to contact Bio-Nordic now.

Tariff Name Eligible Technology Eligible Sizes Tariff rate (pence/kWh)
Small Biomass Solid biomass: Mainly wood chip & wood pellet boilers, but also Energy Crops such as Miscanthus (elephant grass) and municipal Solid Waste (inlc. CHP). Less than 200 kWth Tier 1*: 7.9
Tier 2**: 2.0
Medium Biomass 200 kWth and above; less than 1,000 kWth Tier1*: 4.9
Tier 2**: 2.0
Large Biomass 1,000 kWth and above 1

*   Tier 1 applies annually up to the Tier Break (installed capacity x 1,314 peak load hours, i.e.: kWth x 1,314)

** Tier 2 applies above the Tier Break.

Key aspects of the RHI from 2011 (taken from DECC Website –

  • support for a range of technologies and fuel uses including solid and gaseous biomass, solar thermal, ground and water source heat-pumps, on-site biogas, deep geothermal, energy from waste and injection of biomethane into the grid
  • support for industrial and the commercial sector, the public sector, not-for-profit organisations and communities in England, Scotland and Wales, through the RHI tariffs

The RHI will be funded from general government spending, not through the previously proposed RHI levy.

Key aspects of the non-domestic sector

  • RHI payments to be claimed by, and paid to, the owner of the heat installation or producers of biomethane for injection
  • payments will be made quarterly over a 20-year period
  • for small and medium-sized installations (up to and including 45kWth), both installers and equipment to be certified under the Microgeneration Certification Scheme (MCS) or equivalent standard, helping to ensure quality assurance and consumer protection
  • tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems, with additional compensation for certain technologies for an element of the non-financial cost
  • heat output to be metered and the support calculated from the amount of heat used for eligible purposes, multiplied by the tariff level
  • biomass installations of 1 MWth capacity and above will be required to report quarterly on the sustainability of their biomass feedstock for combustion and where they are used to produce biogas
  • eligible non-domestic installations completed after 15 July 2009, but before the start of the RHI, can apply for support as if they had been installed on the date of its introduction
  • the Gas and Electricity Market Authority (Ofgem) will administer the RHI including: dealing with applications; accrediting installations; making incentive payments to recipients; and monitoring compliance with the rules and conditions of the scheme.