We have been following the development of the Government’s ground-breaking Renewable Heat Incentive (RHI) scheme since it was first announced over a year ago. Last week saw Phase 1 of the RHI open for applications, allowing non-domestic generators to apply for long-term financial support for renewable heat technologies - the first scheme of its kind in the world.

The Department of Energy and Climate Change (DECC) was finally able to allow applications on 28 November 2011 following delays due to the scheme’s compatibility with EU state aid rules. Approval of the scheme by the European Commission was given on the condition that certain tariffs were reduced; for example, large commercial biomass has decreased from 2.7p per kWh to 1.0p per kWh. Please see below a revised table containing the new tariffs available.

Organisations are now able to apply to Ofgem (who administer the scheme on behalf of DECC) for support under the scheme and will receive payments on a quarterly basis for renewable heat generated over 20 years. Interested generators can apply via Ofgem’s website. DECC have stated that the timing for the introduction of Phase 2 of the scheme is under consideration but an announcement is expected early in the New Year.

For more information or to discuss how Shepherd and Wedderburn can assist your business please contact James Saunders or Douglas Campbell.



Tariff name

Eligible technology

Eligible sizes

Tariff rate (pence/


Tariff duration (Years)

Support calculation

Small commercial biomass

Solid biomass including solid biomass contained in Municipal Solid Waste and CHP

Less than 200 kWth

Tier 1: 7.9



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

Tier 2: 2.0

Medium commercial biomass

200 kWth and above; less than 1000 kWth

Tier 1: 4.9

Tier 2: 2.0

Large commercial biomass

1000 kWth and above



Small commercial heat pumps

Ground-source heat pumps; Water-source heat pumps; deep geothermal

Less than 100 kWth




Large commercial heat pumps

100 kWth and above


Solar collectors

Solar collectors

Less than 200 kWth




Biomethane and biogas combustion

Biomethane injection and biogas combustion

Biomethane all scales, biogas combustion less than 200 kWth




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