The Government has launched its long awaited domestic Renewable Heat Incentive (RHI) scheme today (9 April), which it says will offer homeowners payments to offset the cost of installing low carbon systems in their properties.

The new scheme will effectively pay people for the green heat they generate for their homes. It is open to everyone from home owners and social and private landlords, to people who build their own homes and is available to households both on and off the gas grid.

Greg Barker, Minister for Energy, said: “This is the first scheme of its kind in the world – showing yet again that the UK is leading the way in the clean energy sector. Not only will people have warmer homes and cheaper fuel bills, they will reduce their carbon emissions, and will also get cash payments for installing these new technologies.”

He added: “The domestic RHI opens up a market for the supply chain, engineers and installers – generating growth and supporting jobs as part of our long-term economic plan.”

Technologies currently covered by the scheme are biomass heating systems; ground or water source heat pumps; air to water heat pumps and solar thermal panels. Tariffs are as follows: air source heat pumps 7.3p/kWh; ground and water-source heat pumps 18.8p/kWh; biomass-only boilers and biomass pellet stoves with integrated boilers 12.2p/kWh; solar thermal panels (flat plate and evacuated tube for hot water only) 19.2p/kWh.

Only one space heating system is allowed per property but homeowners can apply for solar thermal for hot water and a space heating system.

The guaranteed payments are made quarterly over seven years for households in England, Wales and Scotland. (Northern Ireland has its own RHI scheme). The scheme is designed to bridge the gap between the cost of fossil fuel heat sources and renewable heat alternatives.

The Renewable Energy Association (REA) has already backed the scheme, and says its introduction could make 2014 a breakthrough year for renewable heating.

Mike Landy, head of on-site renewables at the REA, said: “Domestic RHI is set to be one of the highlights of the Government’s green agenda in 2014. It will mean that renewable home heating is not just environmentally sensible, but also financially attractive.”

Leading heat pump manufacturer Mitsubishi Electric has also welcomed today’s launch of the scheme.

It has produced a dedicated website which demonstrates how much a household can receive in RHI payments and how much they will save over gas, oil and LPG heating at http://heating.mitsubishielectric.co.uk/ecodanselectiontool

John Kellett, general manager of the company’s Heating Systems said: “RHI has been planned so that it produces a long term and sustainable growth in the use of renewable technologies. It also makes the case for heat pumps much stronger, especially against carbon-intensive and expensive technologies such as oil, LPG and direct electric.”

He continued: “We know air source heat pumps are one of the most straightforward renewable technologies to install and that they will provide a constant, comfortable level of heat to a building whilst lowering running costs and reducing carbon emissions.”

Meanwhile, Ian Stares, PTS product director for Renewable Energy Products and a member of the DECC RHI Advisory Group said: 'With the RHI launching today, shortly before the Easter break it seems there won't be much time for the heating and plumbing industry to take a break! The RHI has been a long time coming but we should all celebrate its arrival and recognise its significance in achieving the UK's carbon reduction targets.”

Mr Stares added: 'The industry has worked hard to get to this point and a good example of Government and industry working together. The heating industry has been strengthening its knowledge and expertise in this area for a number of years, so I believe we are in a good position to make the RHI a huge success. A lot of hard work has gone into getting to this launch stage so my message is for installers to seize this opportunity and be enthusiastic about all the benefits it presents to the industry and homeowners.