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RHI payments announced for heat pumps

17 July 2013Air Source Heat PumpGround Source Heat Pump

The Domestic RHI (Renewable Heat Incentive) for heat pumps has finally been announced by DECC (Department of Energy & Climate Change). Heat Pumps are primarily aimed at off-gas areas, which equates to around 4 million homes around the UK.

Air Source Heat pumpThe rates are very attractive and have been set at;

  • 7.3p/kWh for Air Source Heat Pumps
  • 18.8p/kWh for Ground Source Heat Pumps

The tariffs will be paid for 7 years and will be index-linked to the RPI. As such the return-on-investment will be fast.

Any Heat Pumps installed now will be eligible for payments once the scheme launches.

What will the payments be worth?

  • Air Source Heat Pumps should net around £700 – £900 pa
  • Ground Source Heat Pumps should net around £2800 pa
  • The above figures only take into account RHI payments, not fuel savings. For someone currently using Oil, LPG or storage heaters their savings could run to many £thousands per year.
  • In order to access the RHI payments customers will also need to have a Green Deal Advice Report and insulate their properties to the levels advised. Bright Green Renewables can arrange this.

How much can be saved?

For simplicity if we assume a £6,000 installation cost (typical 3-4 bedroom house) and the user reducing his energy bill from £1,000 (oil) to £500 (heat pump electricity), then the payback is 12 years based on energy savings alone.

If we factor in the £1,300 RHPP (Renewable Heat Premium Payment) and his energy savings this reduces to 9 years.

If he gets paid £900 per year (RHI) from next summer then the system will be paid back in only 5 years and he stands to benefit from 2 years of profit at £900 per annum (RHI is a 7-year deal).

What other heating system provides a payback, let alone one that is so compelling?

The RHI launches in the spring and now is the time to install a Heat Pump. Demand is likely to surge and demand may exceed supply in the short to medium term.

ACT NOW by contacting Bright Green Renewables on 0800 111 4220 or email us at enquiries@brightgreenrenewables.co.uk.


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