RHI scheme go-live design
The RHI has at last been launched – here are some details
Phase 1 of the RHI for non-domestic installations has now started – see here.
The go-live announcement for the RHI was made on 10th March 2011 and the formal regulations on 22nd June. Find out what they said …
From the horse’s mouth (the hard way)
Read the full design of the Renewable Heat Incentive here and the parliamentary legislation here. The government statement can be found here, and further details here.
It’s all a bit of a dog’s breakfast, but the following comments and this website in general should help you understand what the RHI is trying to do and how it works.
(… or the easy way) — our summary of the key issues
A lot of things have changed from the initial design proposals. Here are some of the key changes:
Domestic and non-domestic systems are being treated separately
Support for residential installations doesn’t start until summer 2013 (having been delayed several times), though there will be a so-called “RHI Premium Payment” like a capital grant for systems installed before then.
Support for industry, commercial and public sector (non-residential) installations eventually began in November 2011.
Not all technologies are supported
The scheme will support biomass (including MSW) heat, geothermal and ground source heat and biogas and solar thermal below 200kW. It also supports biogas injection as originally proposed.
It will not initially support air-source heat pumps, bioliquids, biogas and solar thermal above 200kW nor waste (apart from MSW). These may be introduced later.
See our eligibility section.
Some tariff levels published
The tariff levels have been published only for non-residential systems – and many have changed from the initial proposals.
The tariffs have been calculated to give a 12% return on investment, except for solar thermal where the figure is much lower (probably about 5%).
All tariffs will now run for 20 years
As for the Feed-In Tariffs, tariff levels will be index-linked to the RPI and degression will be applied for future installations.
Systems installed since July 2009 will be able to start claiming tariffs from the appropriate registration date.
Tariffs will be paid by Ofgem from government funds
The scheme will be administered by energy regulator Ofgem, who will make tariff payments quarterly. They should publish guideline shortly. Meanwhile you can read the formal regulations here if you like.
Why the delayed introduction?
The government issued this statement on 29th September (the day before it was due to start!):
As you will be aware, DECC was planning to launch the Renewable Heat Incentive (RHI) for non-domestic generators on 30 September 2011. State Aid approval is a necessary condition for the scheme to go ahead. As part of that process, the European Commission has expressed concerns that the large biomass tariff is set too high. We understand that the Commission has given state aid approval for the RHI, subject to a reduction in the large biomass tariff and we expect to receive written confirmation of this very soon.
Changing the large biomass tariff will require the RHI regulations to be amended and submitted to Parliament for approval. We are unable to launch the scheme as a whole until this process has been completed. Therefore, unfortunately, we will not be able to open the scheme for applications on 30 September 2011 as we had originally planned.
Once we have received written confirmation from the Commission, we will make a further announcement about what this means for the large biomass tariff and the timing of the launch. We are committed to launching the scheme as soon as possible to minimise disruption to stakeholders.
