Subsidised heating

UK: The twists and turns of the RHI

The Non-Domestic Renewable Heat Incentive (RHI) is a government scheme that has encouraged thousands of businesses to install biomass boilers and heat pumps since its launch in November 2011. However, the RHI as we know it is expected to close to new applications on 31 March 2022.

Whilst 2022 might seem like a long time away, the twists and turns of the RHI mean that you need planning permission, environmental permits, and finance in place for your chosen technology by the end of 2020 if you don’t want to miss out.

The Renewable Heat Incentive
The RHI is funded by government and pays the owners of eligible plants including biomass boilers and heat pumps for every kWh of renewable heat put to an eligible use. The amount paid depends on the technology used; for example a biomass boiler might be paid 3.15p/kWh whereas a heat pump can get 9.68p/kWh. Importantly, once you are up and running you are paid by the RHI every quarter for the next 20 years.

What is an eligible heat use?
‘Eligible’ is a word regularly used in relation to the RHI as (understandably) government want to make sure that the heat they are paying for is doing something useful.

First, it is important to note that you don’t have to be using fossil fuel heating already to apply for the RHI. If you are converting an existing, unheated building, or building a brand-new office/factory/housing development that’s fine, you can still apply for the RHI.

Second, what you use the heat for is important. The RHI legislation changed significantly in May 2018 so you might not be able to do what you know somebody else is already doing. Current eligible heat uses include:

  • Heating an office, factory, warehouse or multiple domestic properties
  • Hot water or steam within a building for direct use e.g. washing / cleaning
  • Carrying out a process within a building (including drying in specific applications)

Tariff guarantee
The key dates/deadlines depend on whether you apply for a Tariff Guarantee or not. No tariff guarantee? If you go ahead and install say a heat pump to heat your office you can be confident that as long as it is installed by a company that understands the requirements of the RHI it will be eligible for the RHI. In this case you can submit your RHI application once the installation has been commissioned.

If you take this route, the latest you can submit your application is 31 March 2021.

If you plan to install a biomass boiler that is >1MW or a heat pump that is > 100kW you can apply for a Tariff Guarantee (TG) before you commit to installing the equipment. A TG locks you in to the RHI tariff available on the day your TG application is made (the tariffs are reviewed every 3 months so can go up or down). Tariff guarantees offer the flexibility of securing your tariff now and having until March 2022 to get the project commissioned.

What are the key requirements for a Tariff Guarantee application?
There are many ‘regular’ requirements that good installers are fully aware of and can easily satisfy. These include things like:

  • Make, model and kW capacity of the installation
  • Drawings detailing how the heating system is connected up and the location of heat meters

Documents that are sometimes handled by the owner, at times forgotten and more difficult to produce at short notice include:

  • Planning permission
  • Environmental permits
For more information:
Wallingfen Park
236 Main Road
Newport, Brough
East Yorkshire
HU15 2RH
Tel: +44(0)1430 449440

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