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RHI stats uncovered to reveal one clear message for the future

Non-domestic RHI

November 2014 marked the third anniversary of the introduction of the non-domestic Renewable Heat Incentive (“RHI”) payments and based on the official statistics, the initiative has been strongly supported by businesses and homeowners across Yorkshire & Humberside. The area accounts for 10% of all registered systems in Great Britain with the number of applications made in the last quarter of 2014 being triple the number made in the equivalent period in 2013.

The renewable heat market has been identified as a sector that could provide around a third of the UK Government’s target of 15% of energy from renewables by 2020 and meet longer term decarbonisation targets.

The headline figures mask significant variations in the take-up of individual technologies. Small and medium-sized biomass systems continue to account for the overwhelming majority of installations, accounting for 95% of all applications. Biomass is popular due to the relative ease of installation when retro-fitting to existing properties and also because of the proven track record of delivering heat in all conditions. Countries such as Austria and Germany, who pioneered its development, have been using biomass heating systems for more than 45 years.

Quarterly cuts (or “degression” as it’s known) are resulting in peaks and troughs in activity as installers rush to commission systems before the next RHI degression. The run-up to the last RHI reduction at the end of 2014, which saw a 10% cut to the tariffs paid for boilers of up to 199kW in size, was a very challenging period for installers and their customers.

Businesses and homeowners need to do their research on the credibility of their chosen installer and in particular their ability to complete installations by the RHI deadlines. We are hearing of nightmare scenarios where customers have paid large deposits up front to secure their installation slot only for the installer to miss the deadline due to a lack of installation capacity and even, in some circumstances, the inability to procure boilers in time.

Advice is not to leave your purchase decisions too late. Often customers delay making the final decision on whether to go ahead with project until the next quarterly RHI announcement. The revised RHI tariffs are applied one month after the announcement, which leaves customers (and their installers) scrambling to complete installations in just a few weeks. Explore the options and conclude on the project well ahead of the RHI announcements. The next announcement is due on 28th February for RHI tariffs effective 1st April so customers still have a decent amount of time to make up their mind.

Domestic RHI

Since April 2014, those customers who could not claim the non-domestic RHI tariff have been able to apply for the domestic RHI scheme. The main criteria for joining this scheme, is that the renewable heating system provides heat to one property capable of getting a domestic Energy Performance Certificate (“EPC”). The EPC is proof that your property is assessed as a domestic ‘dwelling’. Without one, you won’t be able to apply and can’t join the scheme.

The take-up of the domestic RHI has been extremely strong, largely because the groundwork of educating the market had been done by the non-domestic RHI scheme. The latest statistics show that a broad range of technologies are being adopted with air source heat pumps (36%), biomass (28%) and solar thermal (21%) leading the way.

The Future for RHI

The Government has allocated RHI budgets up to April 2016 and its future depends on the policies of the next Government. However, all of the mainstream parties have demonstrated their support for the scheme – Labour conceived the RHI and the Conservative/LibDem coalition implemented it. A review is scheduled for Autumn 2015 with outcomes implemented by Spring 2016.

In the meantime the advice is clear – if you are considering switching to biomass from fossil fuels, act quickly to ensure that you secure the best possible tariff and while they are still available.

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