RHI - Businesses to Benefit

A considerable expansion of the Renewable Heat Incentive (RHI) means more businesses across the UK will be able to claim substantial subsidies for the heat they generate.
The improvements, which come into force today, will see higher RHI tariff rates for biomass heat projects and solar heating. This is in addition to crucial new support for air source heat pumps, biomass combined heat and power (CHP) and deep geothermal. Biogas capacity limits also will be extended beyond 200 kilowatt hours. The RHI pays organisations and homes for every unit (kWh) of useful heat produced using eligible renewable technologies.

The Renewable Energy Association (REA) welcomed the changes to the non-domestic RHI first announced by the Government in December.

REA chief executive Dr Nina Skorupska said: "The RHI is now a truly world-leading renewable energy policy. Almost all renewable heat applications are now supported under the scheme, offering businessesgreater choice than ever before on how to sustainably meet their heating needs."

The changes follow the April launch of the domestic RHI and come in the wake of an underspend of the RHI budget in its first year. The improvements also follow lobbying from industry for changes to RHI policy in the face of what Energy Minister Greg Barker claimed were "low levels of uptake" for certain renewable technologies.

New tariffs
Key changes to the scheme include a new tariff for deep geothermal heat at five pence per kilowatt hour (p/kWh); a specific tariff for biomass CHP of 4.1 p/kWh of eligible heat produced, and support for air to water heat pumps (AWHP) set at 2.5 p/kWh.

Tariffs will be set at 5.9 p/kWh for biogas installations with a thermal capacity of between 200 to 600 kWth and 2.2 p/kWh for those greater than 600kWth.

To boost take up of large biomass, tariffs for installations greater than 1MWth will be increased to 2.0 p/kWh, while ground source heat pumps will be moved off a banded tariff onto a single tariff with the first tier at 8.7 p/kWh and the second tier at 2.6 p/kWh.

The Solar Trade Association (STA) provided evidence to Government in support of increasing the 'value for money cap’ for renewable energy support programmes, which has enabled support for solar water heating to increase to 10p/kWh.

Stuart Elmes, chair of the STA Solar Thermal Working Group, said: "The extra support for solar heating means that the economics will now stack up for more projects. More swimming pools, sports centres, food factories and hospitals will now be able to afford year-round heating from the sun."

Wood Heat Association
Also lending its voice to support the policy changes was the newly formed Wood Heat Association (WHA), an affiliate association to the REA founded by wood heat companies seeking to establish a single trade body to represent the modern UK wood heating industry, from equipment manufacturers and installers to fuel producers and distributors.
In regards to the changes Julian Morgan-Jones, Interim Chairman of the WHA, said: "The revised cost control mechanisms more closely match real world deployment and will ensure that wood heat can maximise its contribution to cost-effective emissions savings and renewable energy targets."

Morgan-Jones has previously outlined the importance of the RHI to the WHA. "Our number one focus is securing the future of the RHI beyond 2016. Beyond that, we are also working to professionalise the industry so it is well equipped to tackle the challenges ahead."