The non-domestic Renewable Heat Incentive (RHI) closed to new applicants on 31 March 2021. The domestic RHI closed to new applicants on 31 March 2022.

The information in this resource is intended for reference only.

The Renewable Heat Incentive (RHI) is a UK Government scheme aiming to encourage uptake of renewable heat technologies amongst householders, communities and businesses through financial

The RHI was launched in November 2011 as a scheme for the non-domestic sector. It provides payments to industry, businesses, and public sector organisations. The domestic RHI was launched in April 2014 and focusses on individual homeowners heating their own property. Interested parties should be aware that any renewable heating scheme heating more than one domestic property (ie multiple Council Tax bills) falls under the non-domestic RHI, so for example a small-scale district heating network heating domestic properties. This module covers only the non-domestic scheme.

The RHI pays participants to generate and use renewable heat energy with the objective of helping the UK reduce its greenhouse gas emissions and meet targets for reducing the effects of climate change. Policy for the RHI is set by the UK Government’s Department for Business, Energy & Industrial Strategy (BEIS) and the scheme is administered by Ofgem.

It is important to note here that the objective of the RHI is to encourage uptake and market maturity of renewable heating rather than provide a long-term mechanism to support renewable heat production. The RHI is also cash limited.

The types of heating covered by the scheme are:

  • biomass boilers
  • heat pumps (ground source, water source and air to water)
  • geothermal
  • solid biomass renewable CHP
  • solar thermal collectors
  • biomethane and biogas.

Payments are spread over 20 years with a payment made every three months. These are based on the amount of eligible heat used and are technology and scale dependant.

The Non-domestic RHI is due to close to new applicants on 31 March 2021. Systems with a rated heat output below 100kw must be installed and commissioned by this date.

Larger systems (100kw and above) need to submit a Stage 2 Ofgem application by this date and my commission up until 31 March 2022. No RHI payments will be made after 31 March 2041, so systems commissioned after 31 March 2021 will receive less than 20 years of RHI payments. Ofgem’s Stage 2 application requires projects to have obtained all necessary consents and have full funding secured.

In response to COVID-19, the UK government announced that it will extend the Domestic Renewable Heat Incentive for an additional year (until 31 March 2022) and introduce a third flexible allocation on Tariff Guarantees on the Non-domestic RHI Scheme.