Following of the government’s announcements on the Renewable Heat Incentive, and our online question and answer session (to read the debate, visit http://ow.ly/14aLF), the team at Regen SW has scoured the reports and pulled out the key points for you (below).
 
There are still some unanswered questions, and even more that we expect to come out of our consultation event on 16 March (to sign up, visit http://ow.ly/14aTI), but the points below should give you a good overview of the key elements.

To read the government’s full report, visit: http://ow.ly/14XZG
 
The proposed Renewable Heat Incentive is similar in design to the feed in tariff, with some distinctive features, due to the differences between producing heat and generating power.  It is a consultation document at this stage, so it is subject to change.
 
Tariff payments
• Tariff levels are proposed to provide a rate of return of 12 per cent on the additional capital cost of renewables, with a lower rate of return of 6 per cent for solar thermal (see table of tariff rates at the end of this document)
• RHI will remain open to new projects until at least 2020. Its design and tariff levels will be reviewed from time to time for new projects, to adapt to changes in technology costs and other circumstances.
• Annual payments will be made for installations below 45 kW and quarterly for those above this level.
• The number of years of support proposed varies depending on the technology, from 23 years for small ground source heat pumps to 10 years for biogas onsite combustion. 
• The issue of tax on the payments is still to be determined by the Treasury
• It is unclear whether the payments would be index-linked to inflation or not. 
• It is proposed that payments are ‘grandfathered’, meaning that a project installed in year one of the scheme continues to receive payments at the level set in year one throughout the time that it is eligible for RHI support.  Tariffs are reduced for new projects installed in later years. 
• The market is expected to develop up-front financing schemes.  Central government is unlikely to provide products (outside of the Pay as You Save scheme that is currently being piloted).
 
Calculating payments
• Payments will be calculated on the annual amount of heat output, expressed in kilowatt hours (kWh). At the small and medium scale (see the tariff level tables for details of what is classified as small or medium), the amount of heat generated by the equipment is proposed to be estimated (or “deemed”) when installed, in most cases. This will allow the beneficiary of the incentive to receive a set amount based on the deemed output, to encourage low0energy consumption and discourage wasting heat.
• Deemed payments for small-scale installations will be based upon the estimated heat demand for a building, calculated for each property using the Standard Assessment Procedure (SAP) rating for domestic properties or Simplified Building Energy Model (SBEM) for nondomestic situations, as well as the assessments carried out to create Energy Performance Certificates (EPCs) for new buildings in particular.
• Medium-scale installations will follow the same approach as small scale, with solid biomass installations being allowed to choose between deemed payments and metering.  Installations choosing this approach would still receive the same tariff for the same deemed number of kWh, but where the metered number of kWh used exceeds the deemed number, an additional lower tariff per kWh would be paid for the metered excess.
• Large-scale and process-heating (and medium-scale, where not covered by SAP/SBEM/EPC) support would be calculated as the metered number of kWh multiplied by the tariff per kWh.
• Biomethane injection and district heating would be metered at all scales