08.09.2017  –  Date for implementation of RHI changes announced

New tariffs and caps to come into force in September 2017

Back in January we reviewed the expected changes to the RHI this year.  We now have confirmation from Ofgem that the Renewable Heat Incentive ('RHI') payments for Air Source Heat Pumps will increase by 33% from 20th September 2017 (subject to final parliamentary approval). Ground source tariffs have also been adjusted slightly upwards.


New ground source tariff: 19.86 pence/kWh (previously 19.64 pence/kWh)

New air source tariff: 10.18 pence/kWh (previously 7.63 pence/kWh)


This change will apply to all new RHI registrations and any registrations for the RHI on or after 14th December 2016 will have payments automatically uplifted.


Cap on payments

Coming in to force on the 20th September is the 20,000 kWh heat demand cap for air source heat pumps and 30,000 kWh cap for ground source heat pumps. Caps will not apply retrospectively, so larger installations will get the higher tariff on any heat demand above the cap level.


The impact of this on current projects in development is that some larger projects may find they have a lower annual return. The uplift in the air source tariff is likely to cover this shortfall and indeed may well offer better return. Large ground source projects are the most likely to need some downward management of customer expectations of return on investment.  

More details can be found on the ofgem website