Renewable Heat Incentive: What do the latest reforms mean for you?

Renewable Heat Incentive: What do the latest reforms mean for you?

Further reforms to both the domestic and non domestic RHI came into force from 22 May 2018 – but what has changed and what does it mean for you?

Long-awaited reforms to the Renewable Heat Incentive (RHI) regulations have successfully passed through Parliament and came into effect from 22 May 2018.

This second stage of changes includes:

1. Metering for performance for heat pumps

All new applications for heat pumps to the Domestic RHI scheme will be required to have electricity metering arrangements installed alongside their heating system. The options are:

  • Electricity meters
  • On-board electricity meters
  • A metering and monitoring service package

This change is being introduced in order to help consumers to monitor the performance of their heating system and better understand the system’s electricity usage.

Your domestic RHI payments will continue to be based on the annual heat demand of the property, as listed on the EPC or, up to the relevant heat demand limit – whichever is lower, unless your property is required to have metering for payment under the
existing scheme rules.

2. New metering and monitoring service package (MMSP) payment schedules and enforcement powers

An MMSP works like a service contract and is a useful way of checking how well your heating system is performing. If you are successful in registering an agreement for MMSP you can receive some financial support for installing the package and sticking to the agreement.

New MMSP registrations on or after 22 May 2018 will be able to get a lump sum payment alongside their first Domestic RHI payment, and a maximum of up to seven years of quarterly MMSP payments.

3. Assignment of rights

Installation of a renewable system can be expensive. BEIS recognises this and is introducing an option to help householders access finance to overcome the barrier of the upfront cost of a renewable heating system. This is called assignment of rights, where households can assign their rights to RHI payments to investors. Assignment of rights comes into effect later on 27 June 2018.

4. Changing the degression rules as part of extending the RHI’s budget management mechanism until the end of 2020/21.

BEIS can lower the tariff rates for new applications when uptake of the scheme is higher than anticipated. These tariff controls help to ensure that the scheme remains affordable and open to new applicants. This mechanism is called degression.

In the past, degressions could take place even when there had only been limited growth, however BEIS has now introduced a new rule to ensure growth is always taken into account. This means degressions won’t happen when the number of accreditations for a particular technology has slowed down.

If there is to be a degression, BEIS will announce this in its quarterly forecast.

Want to find out more about the latest changes to the RHI? You can download the full Ofgem factsheet here.

Alternatively please get in touch with one of our team on (01749) 340490 – we are happy to talk through the scheme with you and answer any questions you may have.

 

 

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