Renewable Heat Incentive

The Renewable Heat Incentive is a government schemes which pays households or business with thermal solar panels. There are two types of solar panel - those that generate hot water ("thermal" panels) and those that generate electricity ("PV" or "photovoltaic" panels). The Renewable Heat Incentive (the RHI) applies to thermal panels only.

Hot water panels can be used to generate approximately 30% to 50% of hot water that your household requires. It is stored in a tank. The rest of your hot water will come from your existing boiler or immersion heater, so the systems run in parallel with each other. There are currently no grants available for hot water panels. However, as of the 20th of October 2010, it was confirmed by the Government as part of their spending review that Renewable Heat Incentives will go ahead as planned from the 1st of June 2011. This means there will be regular payments to be made back from thermal panels as follows:

• Scheme to commence on the 1st June 2011
• Expected payment of 18p per kWh for systems up to 45kW (ie typical household size systems)
• This, when combined with the average reduction expected in your electricity bills, comes to £750 to £1,500 per year
• Thermal panel systems cost from £3,000 to £5,000, so the system will pay itself off over about 8-9 years, and then you'll continue to get regular payments and savings, so the average rate of return would be about 8% - much better than a savings account!