Energy Secretary Amber Rudd would do well to cast her mind back just over a year to this article that praised the incentives encouraging people to look at installing renewable energy systems to heat water and their homes and mitigate climate change.

Almost 20,000 households in the UK that have installed renewable heating technology expect subsidies worth several thousands of pounds each year.

Many of these are in off gas areas such as Dartmoor where the demand for alternatives to messy, expensive oil fired heating is high – driven by the attraction of not only saving money but actually recouping the cost of having heat pumps and solar panels installed to harness renewable energy in rural Devon.

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In April 2014 the government launched the renewable heat incentive (RHI) scheme, paying Devon residents who heat their homes using renewable sources, as well as those who will instal new systems. These include air, water and ground source heat pumps, biomass boilers and solar thermal systems.

Payments will be made quarterly over seven years, with tariffs designed to reflect the expected cost of installing and maintaining the devices.

The scheme will apply to systems fitted since 2009. The government says about 18,000 households installed qualifying systems in the past three years.

New-build homes will not be eligible for the RHI, although self-built ones will.

The scheme differs from the feed-in tariff for electricity generated via renewables, such as solar panels, because it applies only to heat generation.

An installer in Devon of the Renewable Energy Hub said: “The feed-in tariff works by selling back excess electricity to your supplier, so you are getting paid for the extra energy you generate. With the RHI, you receive money for the heat you produce for your own home.”renewableenergyhub-center-banner

The RHI is expected to benefit households off the gas grid the most, but could help others worried about high prices for traditional energy. About 35,000 households are expected to fit the technology and sign up to the RHI in the first year, with another 55,000 joining by 2016.

A detached rural house not connected to gas with a heat demand of 18,000 kilowatt hours (kWh) a year could receive annual tariff payments of £800 to £2,400, depending on the type of technology installed, according to the government.

Households must have a Green Deal assessment to apply for the RHI, which can cost up to £150. Systems must be installed by a certified installer to qualify.

cost of renewable technology

Feed-in tariff cut

Homeowners who install green energy technology will receive less from the government after a cut in feed-in tariff rates last week.

The tariff was introduced to encourage the use of renewable energy. It is paid to homes with solar panels, wind turbines, anaerobic digesters and hydroelectricity and micro combined heat and power units.

On April 1 lower payments were introduced for newly installed schemes. Those with existing systems will not see any change.

Homeowners who fit solar panels to their roofs — up to 4kW capacity — will receive 14.38p for every kilowatt hour (kWh) of electricity generated, down from 14.9p.

For wind turbines, there is a sharp cut from 22.23p per kWh to 17.78p. The rate for hydro power is down from 22.23p to 21.12p on a maximum capacity of 15kW, and for anaerobic digesters from 15.57p to 12.46p.

The tariff is guaranteed to be paid for up to 20 years and rises in line with inflation.

Bob Dylan who is an accredited installer on the Micro Generation Certification Scheme said renewable energy could still be cost-effective. “While the rates for solar photovoltaics have fallen significantly since their introduction, so has the upfront cost,” he said. “A typical 4kW system could generate about £750 a year through combined savings and feed-in tariff income. The average cost for a 4kW system is between £6,000 and £9,000.”

The tariff for electricity exported to the national grid remains at 4.77p per kWh.