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Feed-In Tariffs and the RHI
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Government grants have largely been withdrawn for the funding of installations of renewable energy1. Instead there are new incentives, call feed-in tariffs, that will pay you for each unit of renewable electricity that you generate. And from 2012 these will be joined by a renewable heat incentive - known as the RHI - designed to encourage the uptake of other forms of renewable energy.
The tariffs shown in the table below will be increased annually to take account of inflation:
Feed in Tariff levels for different technologies
| Technology |
Scale |
Tariff level for new installations in period (p/kWh) |
Tariff lifetime (years) |
The tariff levels for the electricity financial incentives (pence) were originally calculated to offer between 5-8% return on initial investment. In Autumn 2011, it became clear that the level of uptake for PV panels was far higher than expected and so DECC announced a public consultation with the aim of reducing tariffs for all installations commissioned or registered after 12 December 2011. Existing installations would continue to receive the originally contracted rate.
Tariff levels for electricity financial incentives
| |
|
Year 1 |
Year 2* |
Year 3** |
|
| Anaerobic digestion |
≤500kW |
11.5 |
12.1 |
11.5 |
20 |
| Anaerobic digestion |
>500kW |
9.0 |
9.4 |
9.0 |
20 |
| Hydro |
≤15 kW |
19.9 |
20.9 |
19.9 |
20 |
| Hydro |
>15 - 100kW |
17.8 |
18.7 |
17.8 |
20 |
| Hydro |
>100kW - 2MW |
11.0 |
11.5 |
11.0 |
20 |
| Hydro |
>2MW - 5MW |
4.5 |
4.7 |
4.5 |
20 |
| MicroCHP pilot |
≤2kW |
10.0 |
10.5 |
10.0 |
10 |
| PV |
≤4kW (new build) |
36.1 |
21.0 |
tba |
25 |
| PV |
≤4kW (retrofit) |
41.3 |
21.0 |
tba |
25 |
| PV |
>4-10kW |
36.1 |
16.8 |
tba |
25 |
PV |
>10 - 50kW |
32.9 |
15.2 |
tba |
25 |
| PV |
>50 - 250kW |
19/15 |
12.9 |
tba |
25 |
| PV |
>250kW - 5MW |
8.5 |
8.5 |
tba |
25 |
| PV |
Standalone system |
8.5 |
8.5 |
26.8 |
25 |
| Wind |
≤1.5kW |
34.5 |
36.2 |
32.6 |
20 |
| Wind |
>1.5 - 15kW |
26.7 |
28.0 |
25.5 |
20 |
| Wind |
>15 - 100kW |
24.1 |
25.3 |
23.0 |
20 |
| Wind |
>100 - 500kW |
18.8 |
19.7 |
18.8 |
20 |
| Wind |
>500kW - 1.5MW |
9.4 |
9.9 |
9.4 |
20 |
| Wind |
>1.5MW - 5MW |
4.5 |
4.7 |
4.5 |
20 |
| Existing microgeneration formerly in the Renewables Obligation |
9.0 |
9.0 |
9.0 |
to 2027 |
Year 1 covers the period from 1 April 2010 to 31 March 2011; year 2 from 1 April 2011 to 31 March 2012; and year 3 from 1 April 2012 to 31 March 2013. Year 1 data for larger PV installations reflects the emergency degression announced in summer 2011.
* Year 2 data reflects the DECC proposals as of 31 October 2011 to take effect from 12 December 2011 and still officially under consultation until 23 December 2011. Figures quoted are for single property installations; multiple installations (eg. by a housing association) will earn a lower rate. These are likely to range from 16.9p/kWh for sub-4kWp roof installations, to 10.3p/kWh for those with individual roofs above above 50kWp.
** Year 3 data is provisional and excludes any RPI uplift; it does include the originally announced reduction in payments on wind. All PV figures are to be advised by DECC later (tba).
Please note that some of these data items are provisional and subject to formal review and confirmation.
NB This micro-CHP tariff will only be available for the first 30,000 installations. The Government will carry out a review when 12,000 units have been installed.
1 In Scotland from 1 April 2011, loans of up to £2,000 will be available on a first come first served basis, until a fund of £500,000 is exhausted. Full details and an application form are available from the Energy Saving Scotland website.
Renewable Heat Incentive Payments
Please note that these were announced on 10 March 2011 and are subject to parliamentary approval. The rates quoted in the table below are for industry, commerce and the public sector and may fall over time for new projects, as the cost of renewable heat installations is expected to fall as the market develops. However tariff levels for approved installations will stay fixed and may be increased in line with inflation, so there is an additional benefit in being an early adopter.
Tariff Levels for households will be announced later as they will start at the same time as the Green Deal, probably in Autumn 2012.
RHI Tariff levels for industry, business and large organisations
| Tariff name |
Eligible technology |
Eligible sizes |
Tariff rate
(pence/kWh)
|
Tariff duration
(Years)
|
Support calculation |
| Small biomass |
Solid biomass;
Municipal Solid Waste (incl. CHP)
|
Less than 200 kWth |
Tier 1:
7.6
|
20 |
Metering;
See Note below
|
| Tier 2:
1.9
|
| Medium biomass |
200 kWth and above; less than 1000 kWth |
Tier 1: 4.7 |
| Tier 2: 1.9 |
|
Large biomass
|
1000 kWth and above |
2.6 |
Metering |
|
Small ground source
|
Ground-source heat pumps
Water-source heat pumps
Deep geothermal
|
Less than 100 kWth |
4.3 |
20 |
Metering |
|
Large ground source
|
100 kWth and above |
3 |
|
Solar thermal
|
Solar thermal |
Less than 200 kWth |
8.5 |
20 |
Metering |
| Biomethane |
Biomethane injection and biogas combustion, except from landfill gas |
Biomethane all scales, biogas combustion less than 200 kWth |
6.5 |
20 |
Metering |
Note for small and medium biomass calculations: 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
RHI for households
RHI tariff payments will start for homes alongside the Green Deal from 2012 to allow a more whole-house approach to heat production and energy saving.
In the meantime, up to 25,000 installations from July 2011 will be supported by a "RHI Premium Payment" to help people cover the purchase price of green heating systems. Households off the gas main will be targeted in this initial phase. Those taking up the Premium will then be eligible for a RHI tariff from October 2012 when the Green Deal begins, as will anyone else who has had eligible equipment installed from July 2009.
Table of likely levels of support for RHI Premium Payments:
Solar Thermal - £300/unit
Air Source Heat Pumps - £850/unit
Biomass boilers - £950/unit
Ground Source Heat Pumps - £1,250/unit
Note that liquid biofuel heating systems, such as bio-kerosine (B30K), are not now likely to be eligible for RHI payments.
The data in the tables above is believed to be correct as of 1 November 2011, but we recommend that you should take advice from a competent installer before committing to install a renewable energy system. Or Contact the National Energy Foundation if you are considering a larger or community scheme and would like a detailed appraisal or audit of the opportunities that may be available. There is normally a fee for this service.
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