RHI update puts focus on monitoring and incentives
In May, government announced updates to the Domestic Renewable Heat Incentive Scheme (RHI). The key aims of the changes are to gather more detailed information on energy use by heat pumps; to manage up-front costs for consumers investing in renewables; and to manage government budgets for incentives more closely.
One of the main changes is in ‘metering for performance’. All new applications for domestic RHI are required to have electricity metering arrangements in place alongside their heating system. There are three options available: electricity meters; on-board electricity meters; or a metering and monitoring service package (MMSP).
Government favours and incentivises the MMSP which works like a service contract and is a useful way to check on system performance. Consumers registering for an MMSP receive some financial support for installing the package and keeping to the agreement.
New MMSP registrations on or after 22nd May 2018 are eligible for a lump-sum payment and a maximum of 7 years of quarterly MMSP payments. For a heat pump installation this would be a lump sum payment of £805 and MMSP payments of £115 per year (paid quarterly).
And from 27th June 2018 new rules on ‘assignment of rights’ (AoR) comes into force. A third party (not the property owner) can now pay for installation of the renewable heating system, and the householder can assign that nominated investor the payments from the RHI scheme. This creates more opportunity for access to up-front costs, and assignment of rights would give landlords greater incentive to move their properties to renewable heating sources. AoR is currently available only for domestic RHI.
Three types of RHI-eligible technology already saw uplifts to the tariff rates paid from September 2017. Biomass plant tariffs rose by almost 70% to 6.54 pence per kilowatt hour (p/kWh). Air source heat pump tariffs were increased by 33% to 10.18p/kWh. Ground source heat pump tariffs saw a small rise to 19.86 p/kWh. There were no changes to tariff rates for solar thermal systems.