Funding & Returns

The non domestic RHI is designed to support the additional cost of a renewable heating system over the cost of a fossil fuel counterfactual. As such, developments featuring Kensa ground source heat pumps can expect a 6-13% IRR.

Non-Domestic RHI

Ground source heat pumps provide low cost and low carbon heating. When connected to a heat network scheme (also known as district heating), ground source heat pumps also generate regular Non-Domestic RHI payments.

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At a glance:

  • 20 year income stream;
  • Quarterly payments;
  • 9.1p/kWh on the first 1314 hours of eligible energy produced followed by 2.7p/kWh on any additional heat produced;
  • Heat network schemes with ground source heat pumps only.

Example 1

Example:

Two bed flat linked to a communal borehole field

 

 Displacing mains gas boilerDisplacing air source heat pump
Cost of counterfactual heating system£3,000£4,500
Peak heat load of dwelling (kW)2.502.50
Capacity of heat pump (kW)4.004.00
Assumed space heating load (kWh)30003000
Assumed domestic hot water load (kWh)13751375
Total load (kWh)43754375
Eligible RHI1 Tier 1 hours52565256
Cost of GSHP system£8,500£8,500
Marginal cost of GSHP system£5,500£4,000
Estimated year 1 RHI 1 annual payment£381£381
Total RHI 1 payment over 20 years
Assuming 2.5% RPI increase each year
£9,966£9,966
Internal rate of return6.0%9.8%

Example 2

Example:

Three bed semi-detached house linked to a communal borehole field

 

 Displacing mains gas boilerDisplacing air source heat pump
Cost of counterfactual heating system£3,500£5,000
Peak heat load of dwelling (kW)4.254.25
Capacity of heat pump (kW)5.255.25
Assumed space heating load (kWh)51005100
Assumed domestic hot water load (kWh)16751675
Total load (kWh)67756775
Eligible RHI1 Tier 1 hours68996899
Cost of GSHP system£10,000£10,000
Marginal cost of GSHP system£6,500£5,000
Estimated year 1 RHI 1 annual payment£589£589
Total RHI 1 payment over 20 years
Assuming 2.5% RPI increase each year
£16,023£16,023
Internal rate of return9.1%12.7%

Related Content

The Non-Domestic RHI

The purpose of the Non-Domestic Renewable Heat Incentive (RHI) is to compensate for the cost of installing ground source heat pumps in commercial applications, providing a long term rate of return and fast payback for business owners, developers and social housing providers.