The Renewable Heat Incentive has closed to final extensions. Here's our advice on what you need to know about the RHI in 2023.
Today (31st March 2023) the Non-domestic Renewable Heat Incentive (NDRHI) - a UK Government scheme designed to promote the use of renewable energy for heating - has been closed to final extension applications, bringing an end to the non-domestic aspect of the scheme.
A world-first, the RHI was originally established to accelerate the adoption of renewable heat in both domestic (households) and non-domestic settings (businesses and multiple domestic dwellings) to encourage a move away from fossil-fuel intensive sources of heat. The heat technology the scheme applied to varied, including biomass boilers, solar thermal and ground source and air source heat pumps.
Eligible participants received payments for the heat generated by their renewable heating systems over a period of 20 years – calculated based on type of technology used, the size of the plant, and the amount of heat produced.
Having worked with the RHI scheme since its inception in November 2011, Reheat has spent over a decade working on the scheme in a wide variety of applications, such as hotels, care homes, distilleries, historical properties, estates and tourist attractions.
Here, we reflect on the NDRHI scheme, as well as providing some useful information on its status in 2023, what happens next and what existing RHI users need to be aware of.
Reflecting on the Renewable Heat Incentive
Having been involved in the RHI for over a decade, we’ve seen the good, the bad and the ugly. In our opinion, the RHI – though well intentioned – was fraught with issues, bringing about a lot of poor installations and open to being taken advantage of.
In terms of biomass boilers for heat, we became aware early on that a lot of poor advice was being given to prospective participants who sought to utilise the scheme. A huge number of installations (certainly more than the scheme could handle) were undertaken and often oversized to maximise the available tariff.
This led to biomass boilers being poorly installed which meant a lot of inefficient systems and breakdowns – something still happening to this day.
In Northern Ireland, this came to a head when the scheme was dubbed a ‘scandal’ and scrapped in 2016 due to alleged abuse and misuse. This included overpayment in subsidies, meaning some businesses received more in payment than the cost of the fuel they were using.
Despite the issues, there has been the opportunity for good quality installations to come out of the scheme. Many properly designed, well operated biomass boilers are in operation today which may never have happened if the RHI wasn’t available.
We also believe that businesses were also able to take a more wholistic approach to biomass as a key part of their decarbonisation objectives in harmony with the RHI. Again, it’s unlikely this would have been the case if no such scheme had existed.
Useful information on the Renewable Heat Incentive
Clarifying the Non-domestic Renewable Heat Incentive closure timeline
Originally, the NDRHI was closed to new applications in March 2021 - with projects approved for eligible tariff guarantee and extension applications available to commission and submit an application to March 2022.
However, in response to the global pandemic, the Department for Business, Energy and Industrial Strategy (BEIS) extended the deadline for commissioning for eligible tariff guarantee and extension applications from 31st March 2022 to 31st March 2023.
For more about the NDRHI closure, visit Ofgem’s website.
Is the Renewable Heat Incentive still available?
No. The Non-Domestic RHI is now no longer available to businesses who would like to apply to the scheme. Subsequent extensions to the scheme have also now closed.
Will there be a replacement for the Renewable Heat Incentive?
There are no plans to directly replace the Non-Domestic RHI. However, there are a number of heat schemes in operation for domestic and non-domestic applications.
A good reference is the UK Government’s Heat and Building’s Strategy, including the Boiler Upgrade Scheme to support households and some non-domestic buildings make the switch to low-carbon heat pumps.
For businesses, other schemes support the efficiency of operational heat systems rather than generation. This includes the Heat Network Efficiency Scheme (HNES) which provides grant funding to support performance improvements to existing district and communal heating projects. Reheat has already supported businesses with the HNES scheme and we continue to do so in the latest round.
For new heat networks, the Green Heat Network Fund (GHNF) is a capital grant fund that supports the development of low carbon heat networks for organisations in the public, private, and third sectors in England.
Later this year we anticipate an announcement from UK Government on its biomass strategy. Reportedly due in Q2, the strategy will outline the future for biomass and its role in decarbonising heat.
How Reheat can support you with the RHI and low carbon heat projects
As a HETAS accredited organisation for servicing RHI approved systems, Reheat has worked on many successful biomass installation projects, supporting clients to achieve RHI compliance, and remaining compliant. This extends to the biomass fuel quality, biomass supply chain, data submissions and even the simplification of metering from multiple properties to a single point of generation. In addition, we work to support the retrofit of existing biomass boiler systems, which have seen better days for the reasons outlined earlier in this article.
Even with the RHI no longer available, our experience is that the demand for reliable forms of low carbon heat remains extremely high. The climate emergency, energy crisis and the fact that many industries are under pressure to achieve net zero status by as soon as 2030, means there is already a huge shift towards renewable heat.
We are engaging with many businesses to provide a practical pathway that removes fossil fuel dependence; developing and installing suitable renewable technology and smarter approaches to heat efficiency, for example. Ultimately, our clients benefit from viable, long-term and cost-effective solutions to help them realise their decarbonisation ambitions.
If you believe you still qualify for the NDRHI, have an existing heat system on the NDRHI scheme, or are looking to embark on a low carbon heat project for your business outside of the scheme, then contact our friendly team to discover more about the services we can provide.
