Greener heating could bring its rewards

The RHI offers quarterly payments for seven years to those who install approved eligible heating systems such as biomass boilers, solar thermal panels and air or ground sourced heat pumps.

The RHI payments should cover the initial investment and possibly even pay for the fuel and maintenance cost over the seven-year agreement period.

The rates will vary depending on the technology used.

Payments are exempt from income tax and will be index-linked over the seven years.

Domestic RHI payments to be confirmed as follows:-

1. Air source heat pumps – 7.3p/kw hour

2. Ground source heat pumps – 18.8p/kw hour

3. Biomass boilers – 12.2p/kw hour

4. Solar thermal – 19.2p/kw hour

To ensure efficiency, a Green Deal Assessment must be carried before applying for the domestic RHI.

This will ensure that homes where the new technology is to be installed will be well insulated and energy-efficient homes.

Updated energy performance certificates will be required and to meet these standards, homes will require loft and cavity wall insulation at the very least.

Larger residential properties which are not on the gas grid will typically replace the oil or LPG heating system with a biomass boiler.

Smaller, rural cottages, which are well insulated, would perhaps look to utilise air or ground source heat pumps.

Those properties which are not listed and outside the conservation area, which have suitable roofs, could look to utilise solar thermal panels.

A four-bedroom house with a heating and hot water demand of say, 300,00kw hours per year would require about six tonnes of wood pellets, costing in the region of £1,300.

This would represent a saving of about £700 per year compared with heating oil.

The RHI payment based on the figures to be confirmed would be about £3,600 per year giving a total financial benefit and cost saving of around £30,000 over the seven year agreement.

Any installed technology systems need to be certified under the Microgeneration Certification Scheme and an installer must be MCS accredited.

Those who already have a biomass boiler, heat pump or solar thermal system which was commissioned on or after July 15, 2009, may be eligible for domestic RHI payments.

They must apply within 12 months of the scheme commencing and must also have a Green Deal assessment carried out.

These applications will also need to meet the MCS standard applicable at the date of commissioning.

Any estate owner, landowner, farmer or individual living in a rural location currently not on the gas grid should consider and look into the scheme.

* Matthew Burton, Fisher German LLP chartered surveyors