Money Can Grow on Trees!
The Renewable Heat Incentive (RHI) was set up to increase the uptake of biomass energy use and to enable the UK to reach its carbon reduction targets. The UK government ‘s target is a reduction of carbon emissions by 20% by 2050. The scheme works by giving the owners of biomass boiler heating systems a financial incentive to move away from fossil fuels.
In November 2015, the UK government renewed its commitment to the transition to a low carbon economy by confirming a continued budget for the RHI out to 2020/21. Following a series of consultations from March-April 2016, the government finalised a package of reforms to the RHI schemes in December 2016. It was unclear as to when proposed changes will take effect, following the announcement of the General Election.
It has now been decided that the government's raft of changes to its world's first Renewable Heat Incentive will be implemented on September 20, 2017, whilst declaring intentions for more changes.
There are two categories to the RHI:
Non-domestic RHI
Phase one of the scheme is 'commercial' and open to UK businesses, non-profit, charity and public sector organisations that switch from using oil, LPG or electric heating to biomass heating. It also includes domestic district heating (a biomass boiler which heats several domestic buildings). The commercial scheme runs for 20 years.
Domestic RHI
From April 9, 2014, domestic residents using a single boiler to heat a single property making the switch from oil, LPG or electricity to biomass have been eligible for RHI payments. This phase runs over a seven-year period and payments are 'deemed' – i.e., calculated on an assumption of the overall heat usage of a property.