Renewable Heat Incentive (RHI) Update

The Government have recently announced an uplift in Renewable Heat Incentive (RHI) payments from April 2017 for Air Source Heat Pumps as follows:

Current Tariff: (p/kWh) 7.51p

Uplifted Tariff: (p/kWh) 10.02p

People who join the scheme receive quarterly payments over seven years. The rates are set by the Department for Business, Energy and Industrial Strategy (BEIS), formerly known as the Department of Energy and Climate Change (DECC).

This is important news for any councils and housing associations with off-gas properties and should be assessed on the impact the extra subsidy has on budgets for any upgrade plans for these properties.

We are already seeing a big increase in demand for heat pumps and are currently helping a number of councils and housing associations to develop upgrade programs.  The most recent project we are working on which is an upgrade to 550 off gas properties costing a net of only £750 per property after the RHI subsidy.

The table below illustrates The RHI payments received on a 4 bed council property over 7 years.

4 Bed Typical RHI payments* Using a 9kW Panasonic Heat Pump
Typical Heat Demand 13,038 kW hours pa
Typical Hot Water Demand 2,784 kW hours pa
Heat Pump SPF 3.24
Total RHI Payments 7 Years £8,272

*The payback figures above are for guideline purposes only and may differ subject to initial property surveys of your stock.

The cost for a full heating upgrade to the above property including all pipework and radiators and the installation of a Panasonic Aquarea heat pump and tank is £8,900.  After the RHI payments received of £8,272 the net cost is £628.   This offers significant savings over traditional heating upgrades for off gas properties.   For example to upgrade the property with new storage heaters would cost at least £2,500.  That’s a saving of over £1,800 over storage heaters on cost of install.

Not only are they the cheapest option to run, due to their efficiency they also provide a cushion against future energy price rises protecting residents from steep rises in their future heating bills. In the above example the heat pump will use over 10,000 less units of electricity than storage heaters and save over 5 tonnes of CO2 a year.

How we can help

At Ecosphere we have the experience and knowledge to help, having won the Panasonic Pro Partner Award for the Best Social Housing Project in Europe in 2015 for the work we undertook with Wealden District Housing developing a heating upgrade program to combat fuel poverty.   This targeted off-gas properties on a mixture of oil and storage heaters and to date we have installed over 230 air source heat pumps saving residents hundreds of pounds a year in heating bills.

We have an experienced in-house design team including a SAP / EPC assessor so can accurately model the costs and returns (RHI income) of any upgrades and savings for residents.   We will work with you to identify and analyse your stock, model the costs and returns and then create a program of upgrades.

We understand resident engagement is key – if heat pumps are an unfamiliar technology we are also happy to install pilot heat pumps and offer demonstrations to residents. For further information on how we approached the Wealden project and successfully engaged with residents please see the case study on our website.

Post installation we take care of all the paperwork for you including the management of RHI claims and liaising with OFGEM if required.    We also offer full operational and maintenance packages to ensure the efficient running of the heat pumps.

Finally, we have finance in place that will finance a project over 7-10 years and avoid upfront capital costs if required.

If you would like further information or would like to arrange a meeting where we can introduce ourselves and bring along more information please contact Zoe Forbes on 01825 880600 or email her at

Ecosphere Marketing Team.