RHI Update

In March 2016, the Government published a consultation on changes to the Domestic Renewable Heat Incentive (RHI) scheme. After taking account of the feedback it received, the Department for Business, Energy & Industrial Strategy (BEIS) published its consultation response on 14 December 2016.

The changes to the scheme Regulations that were announced in the consultation response are being introduced in two stages. The first stage of changes to the Domestic Scheme came into effect on 20 September 2017 and the second stage have come into effect from 22nd May 2018.

These second stage changes include:

• metering for performance for heat pumps
• assignment of rights
• revised degression

It was also announced that the RHI’s budget has been extended until the end of March 2021.

Metering for Performance

After planned new regulations come into effect later in 2017/2018, all new accredited applications for heat pumps to the Domestic RHI scheme will be required to have electricity metering arrangements installed alongside their heating system.

The 3 metering options are:

• electricity metering
• on-board electricity metering
•  a metering and monitoring service package (MMSP).

Of the three options, MMSP provides consumers with the most detailed data on the performance of their heat pump.

This change is being introduced to enable consumers to monitor the performance of their heating system and provide a better understanding of the heat pump system’s electricity usage.

Efficient heat pumps are essential to deliver savings on energy bills for consumers.
Domestic RHI payments will continue to be based on annual heat demand of the property listed on the EPC or up to the relevant heat demand limit – whichever is lowest.

Revised Degression 

To keep the scheme within budget, BEIS lowers the tariff rates for new applications when uptake of the scheme is higher than anticipated. These tariff controls are required to ensure the scheme remains affordable and open to new applicants. This mechanism is called Degression.

The BEIS plans will be introducing a new rule to ensure growth is always taken into account. This means degressions won’t occur when the number of accreditation for a particular technology has slowed down.

Assignments of Rights

To help householders access finance, to overcome the barrier of upfront cost of a renewable heating system, the Government have opened up the option for households to assign their rights to RHI payments to investors.

For any further information please see the Ofgem website.