Renewable Heat Incentive (RHI)

Launch of the Renewable Heat Incentive

DECC formally opened the Renewable Heat Incentive (RHI) on 25th November 2011, for industrial, commercial, public sector and not-for-profit and community installations.

Full information on the RHI and guidance for applicants can be found on DECC's website.

All wood fuel consumers who install (or have recently installed) a wood fuel system and use it to generate heat will be eligible for the scheme.

Note: if the system is owned by an energy services company (ESCo) they will be eligible for RHI, not the consumer.

Key features of the scheme:

• System of tariffs based on amount of heat generated
• Quarterly payments for 20 years from the date consumers enter the scheme
• All eligible installations since 15 July 2009 will qualify for support
• Until March 2014, domestic consumers will only be eligible for some financial support towards the cost of installation (Renewable Heat Premium Payment)

RHI regulations are published here

Phased introduction

Phase 1

In the first phase, long-term tariff support will be targeted at the big heat users - the industrial, business and public sector - which contribute 38% of the UK's carbon emissions. Under this phase there will also be some support for households through the Renewable Heat Premium Payment.

In this phase, payments will be based on metered heat. Deeming will not be included.

Phase 2

The second phase will see households moved to long-term tariff support similar to that offered to the non-domestic sector in the first phase. At the moment this development is expected to take place in Spring 2014, see this news item for the detail.

Biomass tariffs

RHI tariffs are published here

Guidance

Ofgem have published guidance for anyone involved with the RHI and sets out how Ofgem will administer the scheme.

• Ofgem guidance: Eligibility and how to apply
• The Renewable Heat Incentive Application Process - An Overview and Key Guidance

For full details on how to apply for the RHI see the How to Apply webpage,  click here to access. This page includes the following:

·         sight of all the questions in the application form so you can prepare in advance.

·         a checklist and help with answering some of the key questions

·         screenshots and step-by-step instructions on how to use the RHI Register.

For those already accepted onto the scheme Ofgem has also provided a Guide to Meter Readings and Your Responsibilities, click here to access the page.

Ofgem also have an enquiries line: 0845 200 2122 open 8:30am until 5pm Monday to Thursday, and 8:30am until 4:30pm on Fridays.

Alternatively, email RHI.Enquiry@Ofgem.gov.uk

Sustainability Criteria

In order to ensure the sustainability of biomass fuel, sustainability criteria for the Governments Renewable Heat Incentive scheme, will dictate that, from April 2014, in order to be eligible for the RHI, biomass installations will be required to demonstrate, either through reporting or sourcing from an approved supplier, that their biomass meets a greenhouse gas lifecycle emissions limit target.

Reporting

Biomass installations of 1 MWth capacity and above will be required to report quarterly on the sustainability of their biomass feedstock for combustion and where they are used to produce biogas. This information will include the amount of biomass used, its type and form, country of origin and whether an environmental accreditation has been met.

Enhanced Capital Allowances and the RHI

While there is nothing in the RHI Regulations that prevents applicants applying for ECA in addition to the RHI, HMT has recently changed the rules regarding eligibility for ECA.  Following their consultation into  Capital Allowances: Feed-in Tariffs and the Renewable Heat Incentive, HMRC states that: "From April 2012 (or April 2014 for CHP installations) ECAs will not be available in respect of expenditure on plant or machinery when it generates electricity or heat (or produces biogas or biofuels) that attracts tariff payments under either of the FiTs or RHI schemes. ECAs may still be claimed (subject the other conditions of the ECA schemes) in respect of expenditure on such equipment as long as no tariffs are paid. Any ECAs given, in respect of expenditure incurred from April 2012 (or April 2014 for CHP installations), will be withdrawn if FITs or RHI tariffs are paid subsequently."

For further details, please follow this link or contact HMRC directly