RHI Consultation

[ALEO Admin]

On 3 March 2016, DECC announced a consultation on proposed changes to the Renewable Heat Incentive (RHI).

The first stage of the changes, with a proposed introduction date of 1 April 2016, include a new budget cap mechanism. This will allow the Secretary of State to suspend both the domestic and non-domestic schemes to new accreditation if the Government assesses spending on the RHI is at risk of exceeding its budget cap.

In the second stage of changes, from spring 2017, the Government intends to remove support for new solar thermal systems under both the domestic and non-domestic RHI schemes.

For the Domestic RHI scheme, the first stage of reforms will also include removing the requirement for applicants to undertake a Green Deal assessment and introduce an exemption to the 183 day occupancy declaration for new applicants with self-build properties. The first stage will also include a shift to using the Consumer Prices Index (CPI) instead of the Retail Prices Index (RPI) to adjust tariffs in line with inflation.

Proposals also include Improving access for those less able to pay by introducing assignment of rights to payments, to allow new 3rd party financing models to develop, and consulting on two options to drive deployment of heat pumps with shared ground loops.

The consultation also aims to promote deployment of those technologies that the Governments thinks are likely to be strategically important in the longer-term, by reviewing the current Air to Water Heat Pump (AWHP) tariff and potentially amending the current Ground Source Heat Pump (GSHP) tariff. The consultation also seeks suggestions on ways to drive up the performance of heat pumps installed under the RHI

The deadline for consultation responses is 27 April 2016.

For more information and to download the consultation document, visit:
https://www.gov.uk/government/consultat ... sed-scheme

Please also see the consultation document for further proposals relating to the non-domestic RHI scheme.

[ALEO Admin]

BEIS published its response to this consultation on 14 December 2016.

The following changes to the Domestic Renewable Heat Incentive will be implemented in spring 2017:

• The tariffs for new ASHPs and GSHPs will be increased to 10.02 pence per kilowatthour (p/kWh) and 19.55p/kWh respectively.
• All new ASHPs and GSHPs applying for support under the scheme will be required to have electricity metering to monitor their heating system. However, payments will continue to be on the basis of the deemed heating requirements of the property, except
  for second homes and where a renewable heating system is installed alongside another heating system, in which cases payments will continue to be on the basis of heat metering.
• GSHPs making use of a shared ground loop will continue to be eligible for the nondomestic scheme and will not be eligible on the domestic scheme – see Chapter 4 for more details.
• The tariff for new biomass installations will be increased to 6.44p/kWh, the level available between October and December 2015, adjusted for inflation.
• Heat demand limits will be introduced, to limit the level of annual heat demand in respect of which any household can receive support. The heat demand limits will be set at 20,000kWh for ASHPs, 25,000kWh for biomass boilers and stoves and 30,000kWh
  for GSHPs. However, this will not disqualify properties with higher heat demands from applying to the scheme. There will be no heat demand limit for solar thermal.
• There will be some changes to the budget management arrangements for the scheme – these are set out in Chapter 5.

Please note, tariffs stated above are in 2016/17 prices and do not take account of any inflationary adjustments which will be made to tariffs on 1 April 2017.

The Government also intend to introduce the option for households to assign their rights to payments through the scheme to a third party. However, this will not be delivered alongside the spring 2017 reforms. The Government now intends that this will be implemented at a later date, to provide extra time to implement adequate consumer protection. This reform will make way for new financing models to develop – for example, where a household receives a free or substantially reduced-cost heating system from a third party in return for assigning their rights to RHI payments to this third party.

To download the full BEIS response document, visit:
https://www.gov.uk/government/consultat ... sed-scheme