Renewable Energy Tariffs Explained

Confused by renewable energy tariffs?

Here's our guide to the different renewable energy tariffs.


The Assistance for Areas with High Electricity Distribution Costs

  • This replaces an earlier arrangement which is commonly known as the ‘Hydro Benefit’ that ended in January 2004.
  • It aims to reduce the cost to consumers for the distribution of electricity to certain areas.
  • At the moment only in the North of Scotland.
  • AAHEDC is an embedded benefit for generators, so a revenue is received at the same p/kWh rate for every kWh exported.

Avoided BSUoS

Balancing Services Use of System

  • The BSUoS charge is the mechanism by which the National Grid (NG) recovers the cost of balancing the transmission network.
  • It is administered by the NG and it charges suppliers and generators daily.
  • The charge is a £/MWh per balancing mechanism unit (BMU) which is calculated every half hour.
  • The closer the system demand, the higher the balancing cost.

Avoided DUoS

  • A charge that covers the cost of delivering electricity over the local distribution network to/from the national transmission system and feeding it directly into homes, businesses and industry.
  • It includes the cost of installing, operating and maintaining the regional distribution networks.
  • It is charged by the local distribution network operator which is determined by the Common Distribution Charging Methodology (CDCM).
  • It is governed by the Distribution Connection and Use of System Agreement (DCUSA) to which is a requirement that all licensed electricity distributors and suppliers become parties.


Feed in Tariffs

  • The energy regulator Ofgem regulates the scheme.
  • Available for smaller renewable energy systems below 50kWh.
  • To qualify, your system must be certified under the Microgeneration Certification Scheme (MCS).
  • Fit payments are made according to meter readings.
  • The tariff depends on the EPC rating.
  • You will receive benefit from:
    • Generation Tariff – set payments for 20 years once registered.
    • Export Tariff – energy generated but not used by you.
    • Reduced Energy Bills.


Levy Exemption Certificate

  • Used to offset the fee of climate change levy (CCL).
  • CCL is a tax on fuels that is used for lighting, heating and power.
  • CCL is charged at a specific rate per unit of energy.
  • The rates are based on the energy content of each commodity and are expressed in kilowatt-hours (kWh) for electricity.

RCRC Benefit

Residual Cashflow Reallocation Cashflow

  • The RCRC data is presented on a £/MWh basis.
  • The Value of RCRC varies between a charge and a benefit.
  • It is calculated separately for each individual 30 minute period.


Renewable Energy Guarantees of Origin

  • These are renewable certificates or origin.
  • Required as a certification to receive some benefits and potentially value at a later date.


Renewable Heat Incentive

Eligible systems for RHI are biomass only boilers which include log boilers, chip boilers and pellet boilers and biomass pellet stoves , wood burning stoves with back boilers do not qualify for RHI, due to their varying efficiency. air source heat pumps, ground source heat pumps and solar thermal panels (flat late or evacuated tube only).

Domestic RHI

  • The Domestic Renewable Heat Incentive (RHI) is a government financial incentive, providing quarterly payments for seven years to households with a renewable energy heating system. You will need an Energy Performance Certificate (EPC), plus a Green Deal Assessment (GDA) to be eligible for RHI.
  • A Green Deal Assessment needs be made at the property to establish your heating use in kWh before you instruct a contractor to install your chosen system.
  • Payment are made based on the actual heat output of the system and are calculated by multiplying it by the appropriate tariff .
  • The scheme is available for households both off and on the gas grid.
  • All must be certified under Microgeneration Certification Scheme (MCS).
  • The RHI is available to both metered and non-metered systems.
  • To qualify for RHI, the heating system must have been first commissioned on or after 15 July 2009.

Non-Domestic RHI

  • The Non-Domestic RHI is for industrial, commercial, public sector and not-for-profit organisations and is paid over 20 years.
  • Eligible systems for RHI are solid biomass boilers, combined heat and power (CHP) systems for solid biomass, waste, geothermal and biogas, solid biomass contained in waste, heat pumps (ground source, water source and air-to-water), solar thermal, geothermal, biomethane and biogas.
  • Non-domestic RHI is metered.


Renewable Obligation Certificate

  • Available for larger renewable energy schemes.
  • Operators can trade ROCs with other parties.
  • Roof/building mounted solar have higher as they require higher levels of support to be able to deploy.
  • ROC is a green certificate issued on the net renewable energy generated each month by an accredited renewal generating system.
  • ROC’s will be sold with directly or indirectly to suppliers who will redeem them against their Renewable Obligation.


Transmission Loss Benefit

  • This recovers the cost of developing, installing and maintaining the National Electricity Transmission System required to allow the bulk transfer of power between connection sites, generation and distribution grids and to provide transmission security.
  • It is administered by the National Grid.
  • Embedded generators can receive it as a benefit which is generally paid out in mid summer each year.
  • Unlikely to benefit solar PV without battery back out and the peak in solar is usually midday in the summer.

If you are unsure about the level of cover required or have a specialised renewable energy insurance requirement, please do not hesitate to call us directly on 01803 869779 or email us via our contact page for help and a quotation. We always prefer to speak to people.