Feed In Tariffs

The information site for the forthcoming guaranteed payments for renewable heat

FAQs

Can I link to your website?

If you want to link to this website, be our guest.

If you want to gratuitously pilfer copy for your own website please note that our terms and conditions require you to do the decent thing and ask permission first!

How do I register my renewable heating system for the RHI?

The installation needs to be registered with Ofgem, the energy regulator, who has been appointed to administer the RHI.

The registration process is described here. If you are not used to dealing with Ofgem, you may find it helpful to use an expert support service.

What if you sell the installation, or ownership changes?

The benefit of the tariffs for the remaining period pass to the new owner.

Chapter 2 of the government's RHI announcement says

Change in ownership

Where an installation is bought by another person, the new owner may receive RHI support for the remaining eligibility period providing it can prove to the satisfaction of Ofgem that ownership has been validly transferred to it, that all eligibility criteria are still being met, and that it will comply with the ongoing obligations required under the scheme.

Where an installation changes ownership, the original participant will be required to provide such information Ofgem may require in order to perform its functions under the scheme. Any attempts to try and continue receiving payments while not in ownership and therefore not eligible, could constitute fraud and will be dealt with accordingly.

Is the RHI a grant scheme?

No; it is a tariff scheme, making regular payments for every kilowatt hour of heat produced by the system.

The government believes that this income stream should enable the system owners to finance the upfront capital costs and (within limits) we agree with them.

Chapter 2 of the government's RHI announcement says

Financing

RHI tariff support will be delivered in the form of payments made over a number of years rather than as an upfront payment.

Options for financing the cost of installations will therefore be an important issue for those considering a switch to renewable heat. A number of stakeholders have highlighted this as a problem, that even if a business or organisation wanted to take part in the scheme, they could not raise the initial capital cost. We accept that this could sometimes be an issue, however, we expect the RHI will stimulate the market to provide a number of different financing options, which could cover both the capital costs and ongoing operational costs for the lifetime of the installation.

How long will the RHI run for?

It will accept new installations up until at least 2020.

Any new installations registered until then will receive tariffs for 20 years from their registration date.

Chapter 6 of the government's RHI announcement says under 'Scheduled Reviews':

It is the Government’s intention that that the scheme remains open to new installations until at least 2020.

Will installations under construction be affected if reviews or degression change tariffs?

The government accepts that the principle of grandfathering should also apply to such projects, but won't incorporate this aspect until 2012.

Chapter 6 of the government's RHI announcement says

Treatment of installations under construction during a review

Whilst grandfathering is intended to provide certainty to installations already accredited under the RHI, we are aware that the lead-in time for some projects can be a number of years and that changes to tariff levels between financial close and completion could mean that the financial assumptions upon which they would have started the project would no longer hold. Equally, if as a result of a review, tariff levels will be raised it could result in projects, which are due to come on line ahead of the review being implemented, stalling until the tariff levels are raised so that they can take advantage of the higher level of funding. This could result in a hiatus in projects coming on line so affecting the levels of renewable heat generation in the short term.

However, we need to balance decisions on the levels of support for such projects against controlling costs for the scheme as a whole and the impacts that this could have on other projects coming forward. As the first scheduled review is not due to start until 2014 with implementation in 2015 we intend to consider this matter further with a view to any appropriate measures being included from 2012.

Will existing installations be affected if reviews or degression change tariffs?

No; the principle of 'grandfathering' will apply. Once an installation is registered for the RHI its tariff is fixed, apart from index-linking for inflation.

Chapter 6 of the government's RHI announcement says

Fixed levels of support following review changes (Grandfathering)

In order to provide the certainty required for sustained growth in renewables the Government is committed to the principle of ‘grandfathering’, where support levels for existing installations are guaranteed. The intention of grandfathering is to provide certainty to those investing in renewable heat installations about the level of support they will receive under the RHI.

This means that any changes to support levels resulting from a review would only affect new projects accredited on or after the date that new tariff levels are implemented. For example, if an installation is accredited from March 2015 and the tariff level received for that technology is changed in April 2015 following a review, that installation will continue to receive the same tariff level regardless of any change made. However, an installation accredited in May 2015 would be given the new tariff level.

Will government stick to its review timetable?

Not necessarily! It may undertake an early review (as it did for the Feed-In Tariffs).

Chapter 6 of the government's RHI announcement says

Early Reviews

In addition to scheduled reviews, the Secretary of State may need to call an early review so that adjustments can be made to a part or whole of the scheme, to deal with any significant change to the assumptions which underpin the RHI. For example, a significant and unexpected uptake of a particular technology or a significant change to the relative cost of renewable and fossil fuels.

We are mindful that scope for an early review introduces a level of uncertainty to the scheme but experience from both the Renewables Obligation and the Feed-in Tariffs scheme suggests that such flexibility is necessary. However, to provide assurance that early reviews will only be called where there are significant changes to the assumptions which underpin the RHI, we intend to set out a specific set of circumstances under which an early review could occur. We intend to consult on the criteria for early reviews as part of the consultation which will take place to consider aspects of the RHI which are being introduced in 2012 as part of the phased approach.

What will reviews of the RHI entail?

Evaluation of all aspects of the scheme to ensure it is working well and delivering its objectives and contribution to the Renewable Energy Strategy.

Chapter 6 of the government's RHI announcement says under

Reviews

We intend to monitor and evaluate the RHI closely to ensure that it delivers our ambitious plans for renewable heat. It is the Government’s intention that that the scheme remains open to new installations until at least 2020, therefore we will have opportunities to make changes to improve its operation. In particular we will: monitor uptake under the scheme; progress towards the 2020 renewables target; cost-effectiveness; fraud prevention; and how well the administrative processes are working.

Reviews will look into all of the tariff setting elements, as well as other aspects of the scheme (e.g. eligibility, metering etc). Reviews will not just be an opportunity to review tariff levels [for future not existing installations] but to also look at other aspects of the scheme to ensure that it is operating effectively.

Just as the RHI on introduction will be set out in legislation, any changes made to the scheme will also need to be set out in legislation and be subject to Parliamentary approval.

How often will the RHI be reviewed?

Every four years starting in 2014-15.

Chapter 6 of the government's RHI announcement says

Scheduled Reviews

We are mindful that in order to provide certainty to investors and developers, it is important that changes to the scheme are not made unnecessarily or too often. We therefore intend to undertake scheduled reviews every four years with the first review starting in 2014 for implementation in April 2015.

Why are tariffs not available in Northern Ireland?

The primary legislation under which the tariffs were introduced is the Energy Act 2008.

This applied in Great Britain, but not Northern Ireland, because energy policy is a devolved power there, so regulated from Stormont not Westminster.

The Northern Irish administration would therefore need to legislate separately if it wants to introduce the schemes in Northern Ireland.

What is Microgeneration?

It is the production of heat or electrical energy at small scale.

This is defined in legislation as follows:

  • Electricity generation at capacities up to 50kW
  • Heat production at capacities up to 45kWth

What are the Renewable Energy Directive (RED) and Renewable Energy Strategy (RES)?

The RED is the directive adopted by the European Union in 2009 to increase the proportion of renewable energy produced in Europe.

Each country has its target for renewable energy in 2020 averaging 20% across the whole EU.

The UK has signed up to this directive with a national target of 15% of all the UK's energy to come from renewables by 2020. The way this will be achieved is set out in the National Renewable Energy Action Plan (NREAP) and the Renewable Energy Roadmap.

How is the capacity of a heating system ascertained?

In principle it is the manufacturer's rating for the maximum heat output of the system.

Chapter 3 of the government's RHI announcement says

Installation capacity

For the purposes of the RHI, the installation capacity will be the total installed peak heat output of the installation. Ofgem, as administrator of the scheme, will require details of installed capacity as part of the accreditation process.

Installation capacity will be simple to establish for standard equipment as it will be part of the information provided by manufacturers. For bespoke equipment it may be more difficult but the output capacity of the installation as commissioned will have to be proven to the satisfaction of Ofgem from technical evidence provided by the applicant as part of the accreditation process. Where the installed peak output capacity is provided with the equipment by the manufacturer, that will be used to rate it for the RHI.

Why would the Spending Review look at tariffs?

The tariffs come from energy users not the Treasury, so are not 'public spending' as such.

However, it has been decreed (by the Audit Commission, we believe) that government must be mindful of the impact of any regulatory measure that has a financial impact on the public. Clearly the Tariffs legislation has added to the cost of energy bills, so this is something the Treasury can consider.

Will the RHI apply in Northern Ireland?

No, the Renewable Heat Incentive will not apply to Northern Ireland. This is because Northern Ireland falls outside of the remit of the Energy Act 2008.

What if I produce more heat than I need?

If you are lucky enough to be connected to a heat network, you can ‘export’ the surplus back to the network, and get paid for it – in addition to the tariff you get. So make sure you are as energy efficient as possible so you can maximise your exports.

In most cases there isn't a heat network and the systems will be designed to produce only the heat that you need (you won't get a payment for wasting it!)

Does the Renewable Heat Incentive only apply to heat? What about gas? What about electricity?

The RHI applies both to heat from low carbon sources and to biomethane fed into the gas grid. A similar measure for renewable electricity was introduced in April 2010. This is called the Feed-in Tariffs and you can see more about it on our sister website: www.fitariffs.co.uk.

Is this a Renewable Heat Obligation? Or related to the other Renewables Obligations?

No. The Government did consider a Renewable Heat Obligation but decided to implement the RHI instead. The Renewables Obligation (RO) and Renewable Transport Fuels Obligation (RTFO) are regulations which require energy suppliers (the companies you buy your electricity or your fuel from) to ensure that a proportion of the energy they sell comes from renewable sources. The RHI is intended for people and companies who install renewables mainly for their own use.

Are there any other restrictions to the RHI?

The main criteria are the type of renewable energy, and installation date.

Systems will also have to be installed to prescribed quality standards in order to qualify (see our page on other eligibility criteria).

A few types of technology have been excluded.

When does the RHI start? Will my system qualify?

The Renewable Heat Incentive is due to come into force in 2011 for non-residential installations and October 2012 for households. See here.

All eligible systems installed from then on will certainly qualify. Many systems installed before then (but after 15th July 2009) should also qualify (but the payments won’t start until the tariffs come into force, and won’t be retrospective). See more details about installation dates.

Does the RHI apply to all forms of renewable heat?

Pretty much all, see a full list of eligible energy sources.

There are some technologies for which a tariff level hasn't been proposed yet, but the consultation asks how to deal with them.

What is the Renewable Heat Incentive?

To put it simply the Renewable Heat Incentive (RHI) is a Government scheme which makes payments for every kilowatt-hour of renewable heat you produce. The level of the payment (the 'tariff') is laid down by the Government and can be different for different renewable energy sources. It's an innovative approach similar to the Feed-in Tariffs for electricity. The RHI also pays a tariff for biogas fed into the gas grid.

What is renewable heat?

It is heat produced from a sustainable source such as solar, biomass or heat pumps. Heat from fossil fuels like gas, oil and coal is not renewable. There is a range of renewable energy sources.

Do I have to pay tax on my Tariff income?

It was announced in the Pre-Budget Report 2009 that the income from the Feed-In Tariffs will be free of income tax for householders who install systems primarily for their own use. See the details here. Similarly, it was announced in the March Budget that the Renewable Heat Incentive will also be Income Tax exempt.

Will my existing renewable heating system qualify?

It is proposed that existing systems will qualify only if they were installed after 15th July 2009 and the Government confirmed on September 16th in Parliament that is has no plans to change this. See more on installation dates.

 

Phase 1 of the RHI

 

 

 

... but it's been delayed twice already!

 

and Phase 2

 

 

... as long as the government doesn't change it's mind again!

 

Phase 1 of the RHI

 

 

 

... but it's been delayed twice already!

 

and Phase 2

 

 

... as long as the government doesn't change it's mind again!

Powered By WolfeWare