It’s time to take advantage of Domestic RHI

The government’s Renewable Heat Incentive scheme has been extended until March 2022 for domestic properties. If you have considered installing renewable heating in your property, it is well worth investigating how much you could earn through the scheme.

Launched in April 2014, the Domestic RHI is a financial incentive intended to encourage UK households to switch to renewable heating systems. At present, the installation of renewable heating technologies involves a significant financial outlay which many households struggle to meet without support.

However, those with eligible systems can apply for the incentive, and if they meet the requirements and stick to the rules, can receive payment every three months for seven years following the installation of their system. The amount that they are entitled to depends upon the type of system and the amount of heat it generates.

There are currently four technologies included in the scheme: ground source heat pumps, air source heat pumps, biomass boilers and solar thermal (panels or evacuated tubes).

Although the RHI tariff varies significantly across the different technologies, the domestic RHI can constitute a significant proportion of the cost of a renewable heating system if properly planned and specified, making it an attractive long term investment.

Overcoming Upfront Costs

To overcome the upfront costs of a system, BEIS introduced an option known as the ‘Assignment of Rights’ in 2018. This allows an investor to help fund the purchase and/or installation of a renewable heating system, by the householder assigning their rights to RHI payments for that heating system to repay the investor. Investors must be registered with Ofgem to provide finance based on the RHI Assignment of Rights.

Uptake for domestic RHI has been significantly lower than expected, perhaps because of the schemes apparent complexity, the number of variables surrounding the payments, and the initial financial outlay required.

The government is currently in consultation about replacing the RHI with a ‘Clean Heat Grant’ which would constitute a one off £4000 payment for those installing a new renewable heating system. Although the guaranteed lump sum may seem more straightforward, it represents a far less generous contribution than the RHI over the lifetime of the heating system.                                 

With less than two years remaining to take advantage of domestic RHI, there is no time like the present to invest in a renewable heating system.


Which? Provides tables giving a breakdown of how much different households could earn by investing in a renewable heating system: https://www.which.co.uk/reviews/renewable-heat-incentive/article/renewable-heat-incentive-rhi/rhi-costs-and-earnings

For more information about the Renewable Heat Incentive visit https://www.gov.uk/domestic-renewable-heat-incentive

If you are interested in investing in renewable heating or other green retrofit technologies, contact Nottingham Energy Partnership at info@nottenergy.com or visit www.nottenergy.com

If you are hoping to make an application for non-domestic RHI (for businesses, the public sector and not for profit), please be aware that this scheme closes in March 2021.