Price-based mechanisms (Non-Domestic Renewable Heat Incentive)
Updated: 19.01.2019
Author: Georgios Maroulis
The Non-Domestic Renewable Heat Incentive (RHI) is a scheme targeted at supporting non-domestic RES-H installations with a fixed amount per kWth produced which is payable for 20 years. The payment is provided to industry, businesses and public sector organisations. The scheme was launched in November 2011 in Great Britain. In Northern Ireland Northern Ireland Renewable Heat Incentive (NIRHI) was launched in November 2012 and is suspended for new application since 29 February 2016. Furthermore, the Department for Business, Energy & Industrial Strategy (BEIS) has published a response to its consultation on changes to the Non-Domestic Renewable Heat Incentive (RHI) scheme.
Eligible technologies
Aerothermal, Hydrothermal, Biomass, Geothermal and Solar thermal are eligible technologies provided they meet technology specific requirements described below. In addition, RES-H installation needs to be first commissioned on or after 15 July 2009 (reg. 7 Domestic RHISR 2014).
| Aerothermal energy | Biomass boilers and biomass stoves are eligible. To be eligible biomass boilers must use a liquid to provide space heating and must be designed and installed to use solid biomass fuel. Biomass stoves need to be designed and installed to use wood pellets and use a liquid filled heat exchanger, enclosed with the system. Moreover, both biomass boilers and biomass stoves have to provide heating to a single eligible property or to both a single eligible property and any related property and need to comply with air quality requirements specified in Schedule 1 of the Domestic RHISR 2014 (reg. 4 Domestic RHISR 2014). |
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| Hydrothermal energy | Solar thermal is eligible provided it uses liquid as a medium for delivering heat and is designed and installed to provide heating s to a single eligible property or to both a single eligible property and any related property. To be eligible, solar thermal cannot be used to generate electricity and has to meet standards specified in Schedule 1 of the Domestic RHISR 2014 (reg. 6 Domestic RHISR 2014). |
| Biomass | Eligible (solid biomass). For plants under 45 kWth certification and accreditation under the Microgeneration Certification Scheme (MCS) is required (art. 5 RHISR 2011). No capacity limitations are imposed, though capacity impacts on the tariff level in Great Britain. In Northern Ireland the capacity is limited to 1,000 kWth (art. 5(b) NIRHISR 2012). In Great Britain, plants that have submitted their applications for accreditation on or after 24/09/2013, should additionally obtain environmental permits or an RHI emission certificate (art. 5(1)(d) RHISR 2011 as amended on 23.09.2013). Solid biomass contained in waste (in Great Britain) and solid biomass and municipal solid waste (in Northern Ireland) is also eligible (art. 6 RHISR 2011; art. 6 NIRHISR 2012). In Great Britain, CHP plants using solid biomass alone or solid biomass, solid biomass contained in waste in combination with each other or any other source of energy are eligible provided combustion unit is new and was first commissioned as part of CHP system on or after 04.12.2013 (art. 9 RHISR 2011). In Northern Ireland, CHP plants using biomass are eligible if they use solid biomass contained in municipal solid waste (art. 9 NIRHISR 2012). |
| Geothermal energy | Ground source heat pumps are eligible if they provide heating to a single eligible property or to both a single eligible property and any related property and use a compressor driven by electricity as well as a liquid to provide space heating. In addition, the seasonal performance factor of eligible ground source heat pumps must be of at least 2.5. They also have to meet standards specified in Schedule 1 of the Domestic RHISR 2014 (reg. 5 Domestic RHISR 2014). |
| Solar thermal energy | Eligible up to a capacity of 200 kWth. For plants under 45 kWth certification and accreditation under the Microgeneration Certification Scheme (MCS) is required (art. 7 RHISR 2011; art. 7 NIRHISR 2012). In addition, collector type must be flat plate or evacuated tube (art. 2 RHISR 2011; art. 2 NIRHISR 2012). |
Amount
The tariffs are calculated on a quarterly basis and published by Ofgem each year by 15th March, 15th June, 15th September and 15th December respectively (reg. 33(2) Domestic RHISR 2014). Tariff rates for the period from 01 July 2018 are provided below (see the “Amount” section).
| Hydrothermal energy | Ground source heat pumps: p 20.46 (€ct 23.13) per kWth (Schedule 5 Table 1 Domestic RHISR 2014). |
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| Biomass | Biomass boilers and biomass stoves: p 6.74 (€ct 7.62) per kWth (Schedule 5 Table 1 Domestic RHISR 2014). |
| Geothermal energy | Ground source heat pumps: p 20.46 (€ct 23.13) per kWth (Schedule 5 Table 1 Domestic RHISR 2014). |
| Solar thermal energy | Solar thermal: p 20.66 (€ct 23.36) per kWth (Schedule 5 Table 1 Domestic RHISR 2014). |
| Aerothermal energy | Air source heat pumps: p 10.49 (€ct 11.86) per kWth (Schedule 5 Table 1 Domestic RHISR 2014). |
Addressees
Entitled party: owners/occupants of the property the domestic RHI installation heats (reg. 10 Domestic RHISR 2014).
Procedure
Process flow | Microgeneration Certification Scheme (MCS) certification. Prior to applying for the Domestic RHI the RES-H installation must be certified under MCS. Inclusion of a RES-H installation on the MCS register demonstrates that it is installed in accordance with a relevant installation standard or a standard which is equivalent to a relevant installation standard (Schedule 4 Part 1 reg. 1(h) Domestic RHISR 2014). Energy Performance Certificate. Prior to applying for the Domestic RHI property applicant needs to obtain an Energy Performance Certificate which is issued as part of the Green Deal Assessment (Schedule 4 Part 1 reg. 1(i) Domestic RHISR 2014). Application for accreditation. Applicants have to apply for the accreditation of the RES-H installation within 12 months of the commissioning date of the installation (date shown on the MCS certificate) if the installation was commissioned on or after 09 April 2014. If the RES-H installation was commissioned before 09 April 2014 then the application for accreditation had to be submitted within 12 months counted from 09 April 2014 (reg. 17 (4) Domestic RHISR 2014). Accreditation. If the Authority believes the application is correct and the installation is eligible, the Authority will accredit the installation by including it in a registry, notifying the applicant and providing a statement of eligibility indicating accreditation date, applicable tariff, process and timing for meter readings, details of the frequency and timetable for payments and tariff lifetime/end date (reg. 21 Domestic RHISR 2014). |
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Competent authority | The Domestic RHI is administered by Ofgem. |
Degression
Cap
Annual Heat Demand Limits are introduced (reg. 29(2)-(5) Domestic RHISR 2014). The Annual Heat Demand Limits cap payments for new entrants to a particular level of annual renewable heat demand. Consequently, when heat demand is greater than these values, plant operators will not receive RHI payments for heat output over these limits. For biomass boilers, which provide space heating, and/but not heating for domestic hot water, the deemed annual heat generation is (since 20 September 2017):
- the heat demand for space heating specified in the relevant Energy Performance Certificate for that property; or
- 25,000 kWh
For heat pumps, which provide space heating, and/but not heating for domestic hot water, the deemed annual heat generation is (since 20 September 2017):
- The result of the formula A=(1-1/B) or
- the result of the formula C=(1-1/B),
Where:
- A, is the heat demand for space heating (and water heating) specified in the relevant EPC for that property
- B, is the seasonal performance factor for the heat pump and
- C, is 20,000 kWh in the case of an air source heat pump, or 30,000 kWh in the case of a ground source heat pump
Eligibility period
7 years (reg. 26(2) Domestic RHISR 2014).
Distribution of costs
| State | The Domestic RHI is being funded from the general government spending, as stated on the website of the Department for Business, Energy and Industrial Strategy (BEIS). |
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United Kingdom
