In the UK we currently generate only around 0.6% of heat from renewable sources. To meet national targets on renewable energy, we need to boost this to over 10% within the next 10 years. This is why in 2009, as part of its Renewable Energy Strategy, the government announced its intention to introduce a Renewable Heat Incentive from April 2011. This will give financial assistance to generators of heat from renewable sources at all scales, ranging from domestic households to communities and industrial plants. 
Technologies covered by the scheme will include:
- air- and ground-source heat pumps
- biomass-fuelled stoves and boilers
- solar thermal water heaters
- combined heat and power using renewable fuels
- biogas from anaerobic digestion
Payments will be funded by a levy on gas suppliers and other fossil fuel suppliers (e.g. coal, heating oil and LPG). Details of the scheme are yet to be finalized, pending a consultation process. However, a set of proposed tariffs was announced in February 2010. For example, air-source heat pumps will attract a tariff of 7 pence/kWh, whereas for solar thermal the level will be 18 pence/kWh. Full details for all technologies are available on the DECC website, by clicking here.
Existing incentives
Some energy suppliers have already introduced their own renewable heat incentive schemes. For example, customers of Good Energy on a dual-fuel tariff (i.e. who who get both gas and electricity from Good Energy) who install a solar thermal system to provide their home with renewable heat, get paid a premium for every unit of heat they produce. For more information see the Good Energy website (quote ref. GE450).