Renewable Heat Incentive (RHI) Q&A

November 19, 2013
Posted by in Blog, Government, Grants, Incentives & Schemes, Tips | Tagged , , , , , , , , , , |

I was recently asked to give a talk on RHI – both domestic and non-domestic applications – as part of the h.Energy week. The latter is organized by Herefordshire New Leaf, a not for profit environmental organisation, and the week entails a series of visits and talks which are open to the wider public.

The talk was at St Peter’s church community centre and I was pleasantly surprised to find it full to bursting with a wide mix of people attending. It was a well-informed audience who asked good questions, some of which are below, along with my answers:

If someone has installed a boiler to serve multiple properties, but only some have been built, does the tariff received also apply to later buildings on the same system, even if they are built after the tariff has degressed?

Yes, tariff is for the installation, just let OFGEM know of existing load and planned future load.

Is an EPC required for a commercial RHI application? 

Unlike Domestic RHI, no EPC (nor any minimum rating) is required.

My local community centre was given a complete refurbishment, including installation of a Biomass heating system, which was funded from different sources – local council grants as well as from independent trust funds. Does the latter constitute public funds and can I still be eligible for RHI?

(NOTE – OFGEM’s duty under RHI Regulation 23 is not to accredit installations where the applicant has not given notice that ‘no grant from public funds has been paid or will be paid in respect of any of the costs of purchasing or installing the eligible installation’.)

In the mention of council funding the key thing to consider is whether this is a grant from public funds. If the council does not own the community centre and installation, then the council funding could be deemed a grant from public funds. Therefore, to qualify for RHI payments, you would need to a) prove the council own the installation or b) that no part of the council funding was spent on the eligible installation (whether funding streams were segregated and funding timelines will be relevant here).

Regarding the trust funds, OFGEM would want to know where the funds behind the trust originated; where did the trusts get their money from? If any parts of the trust funds originated from public funds then this would need further investigation. If the trusts contain only private funds their contribution to the costs of the RHI eligible installation would be permissible.

How lucrative can the RHI payments be?

Phase 1 of the RHI is for non-domestic installations only – this could include schools, multi residential buildings served by one system, farms, district heating schemes, offices. The payments from RHI are very healthy – a 50 kW system used for 1314 hours (which equates to 15% of the year) could make an owner £5190/year for 20 years. For example, the 50KW system installed in the venue where we are talking cost £56,000, so you could readily recoup the capital cost in less than 20 years. Factor in the savings on heating oil (c 6pence per KWh) to those of good quality wood chip (c 3pence per KWh) and the benefits are plain to see.

Domestic RHI – when it appears in 2014 – also offers some good incentives although bear in mind you will have only seven years of payments and you will need to ensure your property meets the minimum energy efficiency thresholds.

Thanks to St. Peter’s church for some excellent tea and cake!

A massive thank you to our guest blogger, Andre Burgess, for this post.

This blog first appears on EMVC Solutions.

EMVC is an energy advisory business, delivering solutions in distributed, low carbon energy generation and energy efficiency services, including smart energy control and monitoring services.