The Renewable Heat Incentive (RHI) is a Government environmental programme that provides financial incentives to increase the uptake of renewable heat. For the non-domestic sector, broadly speaking, it provides a subsidy which is payable for 20 years to eligible non-domestic renewable heat generators and producers of biome thane for injection based in Great Britain.
Ofgem is responsible for implementing and administering the scheme on behalf of the Department of Energy and Climate Change (DECC).
By providing a long-term financial incentive, the objective of the non-domestic RHI is to significantly increase the proportion of heat generated from renewable sources. By driving change in a sector currently dominated by fossil fuel technologies, the RHI can help the UK meet EU targets to reduce carbon emissions and improve energy security.
The RHI scheme provides a fixed income to generators of renewable heat, and producers of renewable biogas and biomethane. Biogas Plants commissioned after 15 July 2009 are eligible for the RHI. The lifetime of the tariff is 20 years.
In 2013 DECC (now BEIS) implemented budget management mechanism for RHI tariffs – called degression. Degression can occur quarterly, dependent on forecast expenditure over the next 12 months and growth over the previous period.