The following is an introduction only. Please take full advice on costs and benefits from other independent sources and from several installers before making any decisions about installing renewable energy.
The Renewable Heat Incentive is expected to open in around June 2011. It will provide a means for you to receive a set payment for all the heat you generate from renewable sources. Deliberate wasting of renewable heat will be controlled for through limits on payments.
Making use of renewable heat usually involves continuing to use another non-renewable fuel in your home (grid electricity, gas, LPG, solid fuel (coal) or oil).
You might need to use other fuels in secondary heating appliances. The renewable heat system itself may rely on a non-renewable fuel to operate, and / or it may be designed to give you a choice between main heating fuels.
For example if you install a thermal store / accumulator cylinder as part of your new heating and hot water system, this might store heat from any or all of a mains gas boiler, a wood pellet stove, an air to water heat pump, solar thermal panels, before distributing that heat to your hot water supply or central heating circuits.
The government has yet to clarify the detail of its proposed payments for renewable heat. Generation from small domestic installations is likely to be deemed and not metered. Solar thermal installations will probably receive the highest tariff rate (possibly at around 18 pence per kWh (or unit) generated).
The rate for solar thermal rate will probably purposely be set to give a lower rate of return on investment compared to the tariffs for the other renewable heat technologies such as heat pumps and biomass (wood) boilers. This is because the solar thermal market is already more established.
A figure like this would mean for some people that solar thermal panels added to a mains gas hot water system could pay for themselves in about the first half of their life, and give an income after that.
For about £4000 you can get a solar thermal system which generates about 2,000 kWh of heat per year. This is enough to produce about half to two thirds of your hot water.
If installed since the end of July 2009 this might go on to earn you about £360 per year in RHI payments for perhaps 20 years (tariff figures and method of deeming performance of the panels are not yet confirmed).
There are multiple ways to configure a system which includes solar thermal panels, and the type of house the system is installed in is important too.
This affects what heat can be collected and stored, and also what heat can be usefully used. Systems with similar components can perform differently in different settings.
A typical household might use 3,700 kWh of gas to produce hot water in their home. A typical solar thermal system might reduce your consumption of mains gas by 2,000 kWh, saving around £70 a year off a typical gas bill.
Households not using gas as the main heating and hot water fuel could save more, perhaps up to £250 a year.
If you are interested in the carbon dioxide emissions savings from renewable heat…
To give an impression of the carbon savings possible with solar thermal:
If you are making a range of changes to the and insulation in your home when you introduce a renewable heat system, your heating requirement, fossil fuel use, level of renewable heat generation and carbon emissions will all change at the same time.
To fully understand the impact of the changes you will need to measure and record how much gas, oil, coal, LPG, electricity, wood was used before you installed the renewable technology and after.
This will allow you to work out the change in total carbon emissions from running heating and producing hot water in your home. See Carbon Trust for more information on how much carbon dioxide is associated with different fuels, including wood pellets.
The RHI scheme is likely to include some constraints on operating fossil fuel appliances alongside renewable appliances.
To claim the Renewable Heat Incentive you will need to install a registered renewable heating product and use a registered installer (registered under the Microgeneration Certification Scheme). To find local registered installers visit our Target 2050 website.
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