Payments under the Renewable Heat Incentive scheme are provided to cover the additional financial costs associated with renewable heat technologies by covering the difference in upfront capital and ongoing costs between renewable and conventional heat.
The tariffs will also pay a return on investment, in addition to the cost difference to conventional heat. This was set at 12% across all technologies but is set at 6% for solar thermal due to the fact that they have lower installation charges and are relatively well-known. This return on investment aims to compensate people for the relatively high upfront costs for the equipment and installations.
Tariff payments to all RHI beneficiaries will be done over 20 years to encourage users to operate and maintain their equipment over the tariff time. The level of payment will increase over this 20-year period based on inflation rates calculated using the Retail Price Index.
Householders are not eligible to join the RHI in its present form. However, they can obtain a grant towards the cost of installation between now and March 2013 nder the RHI Premium Payment scheme. The level of grant assistance available depends on the type of technology adopted.
