Find out how the Domestic RHI rates are calculated for ground source heat pumps.
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How RHI payments are calculated
The eligible heat for Domestic RHI payments will be worked out using the following method:
- From your EPC, establish the annual heating and hot water demand (kWh/yr), for example 25,000kWh/yr
- To calculate the “renewable” content, first divide this by the heat pump SCOP, for example 3.4* to find the amount of electrical energy the heat pump will consume: 25,000 / 3.4 = 7353kWh/yr
- Deduct this figure from the EPC total to calculate the “renewable” content: 25,000 – 7353 = 17,647kWh/yr.
- Multiply this figure by the RHI tariff (20.46p/kWh) to calculate the annual RHI payment: 17,647 x £0.193 = £3,599 per year, each year for 7 years.
The SCOP of the system will need to be estimated by an MCS installer. The rating will be recorded by the installer and given to the owner of the system as part of the installation process.*Your heat pump SCOP is specific to each product – please contact Kensa for more information.
The amount of renewable heat generated by a heat pump depends on its efficiency – that is, how much electricity it uses to operate per unit of heat it generates. The term for heat pump efficiency averaged over a whole standard reference year is Seasonal Coefficient of Performance (SCOP) which is normally between around 2.5 and 4. For example, a heat pump with a SCOP of 3 generates 3 kWhs of heat for every 1 kWh of electricity it uses. This means that 2/3 of the heat output of a heat pump with an SCOP of 3 will be renewable, and therefore eligible for RHI payments.
Not all of the heat generated by heat pumps that run on electricity is renewable. Renewable Heat Incentive (RHI) payments for ground source heat pumps will only be made on the renewable portion of their heat output. This is the energy that comes from the ground or water, net of the electricity used to run.
Multiplying the deemed figure by the technology’s tariff rate will determine the annual payments.
The deeming calculation for ground source heat pumps will be the estimated heat use (in kWh) of a property, taken from the Energy Performance Certificate (EPC).
The Domestic Renewable Heat Incentive (RHI) is paid for 7 years on each kWh of renewable heat the ground source heat pump generates.
To work out how much heat is generated, Ofgem use a ‘deeming’ calculation that estimates the property’s expected annual heat usage.
To minimise the burden on applicants, BEIS are working with MCS to make it an MCS Installation Standard requirement that all new systems installed in the domestic RHI are ‘meter-ready’ where possible. This will not apply to legacy installations. Making an installation ‘meter-ready’ will include:
- Leaving sufficient space for heat meters to be fitted in defined locations;
- Installing isolation valves to avoid the need to drain systems when fitting heat meters;
- Leaving the pipework accessible (i.e. not boxed in) to enable meters to be fitted;
- Providing information about the installation (this will help BEIS to select appropriate sites for RHI metering).
Payments will generally be based on a deemed output, based on an EPC and the system efficiency (as calculated by the MCS installation company).
Payments will be based on metered renewable heat usage rather than deemed usage in two situations:
- If the renewable heating system is installed alongside another fossil fuel or renewable space heating system (this includes hybrid systems);
- For second homes.