Phase one of the Renewable Heat Incentive (RHI) scheme is now open for applications. The Renewable Heat Incentive is a Government funded scheme aimed at increasing renewable energy consumption and is the first financial incentive of its kind in the world. The scheme is just one of the Government's policies aimed at helping the UK achieve its targets under the Renewable Energy Directive 2009 to source 15% of its energy from renewables by 2020.
The RHI scheme is being launched in two phases. Phase one of the scheme targets the non-domestic sector and stage two will apply to domestic households. It is anticipated that phase two will also extend the list of eligible technologies. This second phase is due to be launched in October 2012 although the exact date is still unknown.
Under phase one of the scheme, organisations installing an eligible technology can receive quarterly payments for a period of 20 years to help offset the capital and running costs of renewable heat installations. The level of support received will depend on the size and type of installation and the amount of heat produced. Metering arrangements must be put in place to allow for ongoing monitoring. It is anticipated that the tariff provided to new applicants will reduce over time as the cost of renewable heat technologies decrease. The scheme will be administered by Ofgem who will have responsibility for accreditation, making payments and monitoring compliance.
The scheme will include the following technologies (located in Scotland, England or Wales): solar thermal installations, ground and water source heat pumps, onsite biogas combustion, deep geothermal, certain biomass and the injection of biomethane into the gas grid. The heat generated must be used for an eligible purpose and the installation must have been installed and first commissioned on or after 15 July 2009. Further details on eligibility are set out in The Renewable Heat Incentive Regulations 2011 (the "Regulations") or volume one of the Ofgem guidance notes "Eligibility and how to apply".
Applications for accreditation can be made online via the Ofgem RHI website. Details of the installation along with supporting documentation will be required to be submitted for review. Following review, if the installation is accredited, Ofgem will advise the participant of their ongoing obligations or where they determine that the installation should not be accredited, they will intimate this to the applicant providing an explanation of their decision.
In order to remain accredited and therefore receive payments under the scheme, participants must comply with various ongoing obligations. Obligations will include the requirement to maintain the equipment in accordance with the manufacturer's instructions and to keep evidence of such and submitting periodic reports to Ofgem providing various information including the meter readings and heat output data, ongoing fueling requirements and the treatment of additional capacity. Full details of the maintenance and reporting obligations can be found in the Regulations or in volume 2 of the Ofgem guidance "Ongoing obligations and payment".
For a copy of the RHI regulations and guidance notes see http://www.ofgem.gov.uk/e-serve/RHI/Pages/RHI.aspx
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