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Improving non-domestic RHI: Have your say

We’ve started a series of LinkedIn discussions to get your views on ways to improve the non-domestic RHI scheme ahead of a policy review in 2014. Tell us what works, where we can improve and what you think the review should cover.

Since it was launched in November 2011 the non-domestic RHI has driven the uptake of 0.5 TWH of renewable heat and given out £21.8m in incentive payments.

To date our focus for the RHI has been on maximising the cost effective deployment of renewable heat (within budget), addressing key issues and extending the scheme to other renewable heat technologies.

But we feel we can do more to improve the quality and value for money the scheme offers, as well as increase the quantity of heat deployed.

To help us achieve that we want your views. Tell us what works, what doesn’t and share your ideas for improvements or quick-wins.

As a starter for ten we’re thinking of framing the review around three themes:

These are just suggestions. If you have other ideas for key themes please let us know.

To avoid creating uncertainty in the market there are some things we don’t plan to consider as part of the review. These include:

  • changes to new tariffs
  • questions about the tariff setting methodology

The review will also have to align with other government plans and activities in this area.

But aside from those we’re looking for good ideas to help improve all aspects of non-domestic RHI. So please take part, share your views and help us make non-domestic RHI work better for everyone.

Please send us any comments by Friday 20 December.

 

30 Responses to “Improving non-domestic RHI: Have your say”

  1. Tim Crook says:

    Great that developments regarding RHI are so broadly discussed – just a note of caution though: the act of using phrases like ‘2014 review’ delivers a significant amount of uncertainty into the scheme. We are already aware of potentially large projects that may not go ahead because the investor is concerned about minimum energy efficiency criteria changing the economics, and uncertainty about how much time is left under the current arrangements.
    It is absolutely right that the scheme is reviewed and that energy efficiency is considered, but would it be possible to at least give some indication to the sector of when a review may take place and/or when any alterations would become live?

    I’ve been working with the RHI since it began, and overall I’ve been impressed with the pragmatism of DECC and Ofgem regarding administration. I would however, encourage policy makers not to underestimate the effect of policy announcements on investor confidence, and the length of time many of these projects take to be completed. It is months, not weeks.

  2. Tom Fletcher says:

    The Government is wise to consider the impact of tariffs and the variable nature of that element.

    RHI is an excellent incentive for all and it needs to be promoted in the simplest manner possible. The old adage of Keep It Simple Stupid definitely applies, as complicated technicalities scare people away.

  3. UKHFCA would urge that DECC apply a tariff based support mechanism for hydrogen and SNG in 2014, alongside that applying for bio-methane. This will facilitate the implementation of power-to-gas and methanation schemes in the UK, similar to those operating in Germany, so that many TWh of ‘green gas’ can be generated.

    These are based on the conversion of excess renewable power by water electrolysis to produce hydrogen
    (i) for injection directly into the gas grid or into an industrial gas-fired thermal process; or
    (ii) for combining with waste CO2 to produce synthetic natural gas via methanation.

    This approach delivers synergistic benefits for the gas and electricity industries by acting to decarbonise natural gas while simultaneously assisting supply/demand matching in a power system with an increasing proportion of wind/solar power.

    One of our members, ITM Power, has recently undertaken techno-economic feasibility studies of hydrogen injection and methanation (funded respectively by TSB and DECC) in conjunction with partners (including National Grid, SSE, Shell and KIWA-Gastec). Implementation strategies to assist the RHI objectives of decarbonising heat have been identified for application in the non-domestic sector and nationally.

    We believe that within the RHI, DECC should now place a focus on the implementation of hydrogen injection and methanation as a way of accelerating the adoption of renewable heat in the UK.

    Finally, DECC should identify fuel cells combined with heat pumps as a very low carbon form of heat provision:
    a. 2kWh of gas could through a fuel cell heat pump provided up to 6kWh of heat (1kW of fuel cell waste heat; 5kW from heat pump)
    b. Natural gas supplied fuel cell heat pumps could reduce strain on grid vs conventional pure electric heat pumps
    c. Provides a step change increase in efficiency of gas heating and major reduction in its carbon intensity

  4. Andy Howard says:

    I have found the scheme to be well set up and run, and Ofgem to always be helpful. The website could be easier to use, in terms of speed of response and more clearly set out, both when making applications and inputting periodic data. Having an ‘expected response date’ rather than ‘in review’ or ‘pending’ would be good, so that I can estimate when something may be taking longer than normal to process and make/not make a call to chase/query. I would say the biggest query is over what will be the inspection and audit process to ensure that installations continue to do what they say they’ll do over the years?

  5. Darren says:

    Rather than developing the market how about expanding the theme to developing the economy e.g. emerging technologies demonstrator projects, local employment and work placements for projects, removing the barriers for SME’s to win bids for this type of work…

  6. Improvement in efficiency is a two fold problem. Firstly, improving equipment efficiency can be difficult but maintaining it above a base level should be a requirement. As biomass boilers need to be serviced at least once per year a flue gas analysis must be available every year. This should give an inferred efficiency no less than say 88%.
    Improving that of the building is highly desirable but difficult to incentivise whilst energy costs are low. One possible idea would be to apply for improved building efficiency and then retain the estimated RHI payment for say ten years. The client would need to finance the work but would get increased support and lower bills.

  7. Alan Young says:

    I represent Llangynog Memorial Hall which is a Charitable Community organisation in deeply rural North Powys in Wales. We are installing a new Biomass Boiler as part of a redevelopment project. We have received a National Lottery ‘People and Places’ award. The new heating system was part of our Lottery bid and was included in the bid as a result of receiving advice from Offgem who told us that Lottery Awards were classed as ‘State Aid’ and not as a grant and as such we would still be eligible for the Non Domestic RHI scheme. We now discover that this no longer applies even though there are some organisation who are in receipt of both Lottery AWards and RHI payments. This is patently unfair and a classic case of moving the goalposts. As a small, rural, charitable organisation we are in no position to repay the Lottery Award. As part of the review you should be examining this policy and making sure community organisations are allowed to receive both Lottery Funding and the RHI. As a further consideration the tariff for organisations like ours should be increased to encourage further organisations to move to Low Carbon, Renewable Technologies. The policy at the moment discourages small, rural organisations from moving away from the use of fossil fuels to generate their energy. It is important to give consistent advice through Ofgem and to increase the uptake of renewable alternatives.

    • Kristy Revell says:

      Hi Alan,
      At the moment you can’t get RHI payments for installations that benefitted from a public grant. The exception is installations completed and first commissioned between 15 July 2009 (when the RHI was first announced) and 28 November 2011 (when the scheme started). In these cases the grant must be repaid to the granting authority before RHI payments can be made. However, we think more flexibility around the eligibility of public grant funded installations for RHI could encourage more installations. We plan to introduce greater flexibility next year. We will make regulatory changes to extend the eligibility window for repayment of grants and to allow some grant recipients who are unable to pay back their grants to access the RHI via reduced tariff payments. If you have any further questions please email us at rhi@decc.gsi.gov.uk

  8. Hi Kirsty,
    We have a company desiring and installing GSHPs into commercial and domestic builds and employ 8 staff.
    The new announcement of the proposed non domestic will probably result in us laying off not recruiting more.
    We have installs in multiple residence builds ranging from 10 x one bed apartments to 42 x one bed apartments. We have reduced the fuel bills by over 50% and had independent consulting reports carried out over six months to back our claims and report higher than usual SPFs .
    We have been told that the 4.8p / kwt was to be increases to between 7.2 and 10.3 , the 7.2p for total generated heat. We are now told that we are to get 8.7p for the first 1,314 run hours and 2.6 0 thereafter, this 1,314hrs or 15% is less than the normal 2-2,400hrs run time which all GSHPs tend to do plus it’s stated in the ground collector tables for MIS3005. We are now going to be forced to oversize the gshp to reduce the run time but still deliver the kwt .
    We have used one of our commercial installs and calculated the 4.8p which is what we are currently getting and then calculated the same system at the 8.7p, the higher tariff actually returns less than the 4.8p.
    Commercial installs are more likley to run 3-4000hr per year which makes the lower tier of 2.6p useless however if we had a system running longer than the 4000hrs then it returns just about the same as the 4.8p.
    We have several systems designed and provisionally booked for next year after we calculated at the .7p / kWt but now we are unsure of these after we give the new ” lower higher tariff ” to our clients. The commercial was begining to take hold but as usual DECC have moved the goalposts yet again causing more confusion and uncertainty .
    Look forward to your answer
    Dave Thompson
    Groundheat

    • Brendon Uys says:

      Dave I totally agree with your comment, I have also run the models with current installations and have found exactly the same answers you have.I cannot understand where DECC gets the 1,314 full run hours from. If you do a simple calculation with an average tariff of 7.2 p equates to about 2300 full run hours per annum.

      DECC please can you publish your calculations on how you have achieved an average of 7.2p using the 1.314 full run hours per annum. I am sure this will clear up a lot of misunderstandings.

      I cannot understand why DECC does not treat all renewables the same and have a level playing field for all. The uptake figures clearly state that the RHI is heavily weighted towards Biomass, We were assured that this review would rectify this and balance out the uptake figures.

      Clearly this is not the case as the Biomass tariff has not changed (the budget has just been increased probably taken from the ground source budget) and the ground source tariff has had added unwanted bureaucracy and has effectively been reduced.

      Please can you sort this out and please stop adding to the layers of bureaucracy that you have already created.

      Regards
      One very dispodant heat pump installer.

      • nick hannigan says:

        I have to concur with you comments whole heartedly, and as an installer of heat pumps and biomass the beurocrasy and constant changing of the goal posts have resulted in ridiculous hours of recalculations, changing of equipment ,etc all to meet the latest conditions for qualification. I have had one installation which took nearly eight months to achieve acreditaation because of a lack of understanding from gemserve .I think there should be a forum/ conference where the installers can directly voice the problems encountered with getting their installations passed for rhi, and in addition the problems encountered with planning departments,etc, which are detering clients from embracing the rhi

  9. Debbie Ashton says:

    I have an application which has been going on for over a year. One thing we have been asked for is proof that the bio-mass boiler is designed primarily for wood pellets. I would have thought that those dealing with the application would be aware of the details of the boilers being installed, and also that the installers are only going to install a compliant boiler. Why we are required to further get evidence (a letter from a foreign manufacturer) is ridiculous.

    • nick hannigan says:

      I have also had an installation which has taken over a year to achieve accreditation, and the hoops we have had to go through to achieve rhi status have been rediculous. One hurdle has been the planning department of the local council, who initially required a mapping exercise to be carried out etc, all of which was as our cost. It was found that the govt has already all the data required for them to obtain the information required for their purposes in a library specific for local govt environmental departments to use. I downloades the information and forwaarded it to the advising them to do their own homework, it didnt help by their officer stating that i was not competant /sufficiently qualified to carry out such an exercise. Having been involved in commercial and industrial as well as domestic heating systems for over 30 years, both in system desin and installation, I was a trifle irritated at the arrogance of that particular individual , and it was rewarding to see him sqirm at the meeting held in the council offices once the data was pprovided. I was also disturbed by the lack of knowledge from those dealing with the individual application at gemserve. It appears that all they are trained to do is out ticks in boxes. The knowledge of heating syatems appears to be virtually none existant

  10. Simon Saward says:

    Hi Kirsty, We are MCS accredited Biomass Boiler installers. We need a single book of rules so we can ensure everything about our installations is compliant. Customers need a single book of rules so they clearly understand your scheme. Best regards.Simon Saward.

  11. Hi, I am a VERY SMALL business (tea room) My premises has HUGE single glazed windows. Not only does this cost me a fortune in heating bills, but adds to global warming. There is no financial incentive for me to upgrade to double glazing as I do not anticipate being here for more than a year or so. My landlord has no incentive to upgrade as he gains nothing while I am paying the fuel bills. This story is repeated all the way down our high street. Some ideas please? Some legislation similar to that being introduced for domestic landlords with a requirement to upgrade property with regards to U-values?

    • Steve Ivie (DECC) says:

      Hi Jill, a minimum energy efficiency standard for private rented properties in England and Wales will be introduced from 2018. We intend to prioritise the least energy efficient properties (probably those rated below an E EPC rating). Landlords will likely need to improve their properties to at least an EPC rating of E, or undertake those works that can be funded through a Green Deal and/or also ECO for domestic properties, even if it meant the property remained below an E rating. That would however be conditional on there being no net or upfront costs to landlords.

  12. Dear Kristy.

    I am a volunteer director for the UKs first renewable heat community energy project in a school. We are just in the final phases of our communtiy energy share offer which closes on 11.12.13 raising over £500,000 for renewable heat and we plan to be supplying heat to our school by next summer.

    We feel there is a hugh amount of untapped potential for community energy to deliver renewable heat and our project is real evidence of that. The RHI can certainly help better support this. A dedicated tariff for qualifying community renewable heat projects (i.e those delivered by non-profit/social enterprise through local communtiy funding) would be a a much needed incentives to such projects. As would be early accreditation of projects – perhaps for a fixed time period.

    Kind Regards

  13. Tony Amis says:

    I have worked for GIEnergy for over 8 years raising the profile of energy foundations (loops in piles) and other ground loops connected to heat pumps to provide heating and cooling. Whilst the increase in RHI for GSHP’s is appreciated. I would now like to see steps being taken to introduce a renewable cooling incentive in a similar manner to the RHI..
    GSHP’s have a greater CAPEX than biomas boilers and the GSHP industry has suffered as result of the higher RHI tariff for biomass boilers over the past few years. Introducing a renewable cooling tariff would help to redress this imbalance as most GSHP units have the ability to heat and cool buildings, saving building space and equipment. The GSHP industry urgently needs this clear differentiater.

    • Kristy Revell says:

      Hi Tony,
      We recognise providing a cooling function and storing the heat in the ground is an important benefit of this technology. So waste heat from cooling (which is subsequently used by a GSHP for heating) will be made compatible with RHI support. This allows GSHP to benefit from their ability to perform cooling very efficiently. We don’t believe there is a case for directly supporting the cooling itself. Hope that helps. Thanks.

  14. David Sexton says:

    The only comment I have is that I am one of the few pre 2009 early adopters who do not qualify for my boiler installed in 2007 . I have to say that this is fundamentally unfair that we do not qualify even if we fully comply with all requirements having funded most of the high costs of plant and installation ourselves. I would have thought that if we paid back any grant received and had the installation inspected and upgraded if necessary at our own expense plus any other condition necessary we could have received the RHI – there are not many of us and we are effectively in limbo until our equipment reaches the end of its useful life. My installation when fully completed cost about £18000 and I recieved a grant of £1500.

    • Dear David,
      We have several customers like yourself were we installed GSHPs into properties prior to 2009. We have spent many hours on the phone to EST, Ofgem, Gemserve , NIEC to no avail yet all say there should be a route around it. We agree with you that customers like you paid far more for an install compared to today’s prices.
      We looked into removing perfectly good appliances and install new to qualify as a new install but have been told we can’t unless the old one is faulty !
      We follow all updates concerning RHI and have a full time employee in the office for this purpose yet still we are unclear. Every time we call EST or Ofgem we get a different person giving contradicting advice to the last, no one will give you an answer in writing they just direct you to the website which isn’t the easiest read.
      Regards
      Dave

      • Kristy Revell says:

        Hi David and Dave,
        To confirm, installations before 2009 don’t qualify for RHI. This is designed to ensure value for money for the taxpayer. However, ways to improve the advice given to prospective applicants and the overall customer journey is something we are interested in exploring – so if you have any further examples or ideas, please do share them here. Thanks.

      • nick hannigan says:

        I have to agree. everytime we contacted ofgem we were given the run around. Having now installed several installations it is amazing the difference it can take two indentical installtions to achieve approval for rhi. One took two weeks, the other over a year!

  15. One of the key problems is that there are irresponsible businesses – our experience with NAME REDACTED (but given to DECC) – who supply undersized products that use excess energy thereby undermining the credibility of technologies such as ground source heat pumps. They also escape from providing service as fast as possible because it is more profitable to sell products only.

  16. Emma Burton says:

    I am domestic customer so perhaps shouldn’t comment here but FYI:there needs to be a much clearer guide through the process for people.There needs to be a flow diagram with who what where and when to do certain things also a checklist and reminders throughout the process.Information is currently disjointed including getting various different companies to do different parts of the scheme-its very confusing.

    • Steve Ivie (DECC) says:

      Thanks Emma, I’ll pass this on to the domestic RHI team

      • Aaron Gould (DECC) says:

        Hi Emma,
        Ofgem will be issuing a range of guidance material when the scheme launches in the spring. Specifically they will be releasing:

        • Fact sheets relating to specific technologies and special circumstances
        • Essential guide for customers
        • Essential guide for metering (which is complicated in a way I never hope to know more about)
        • Essential guide for installers, and
        • A Reference guide

        Hopefully this will help.

        Thanks

      • nick hannigan says:

        Our company guides the client through the process from concept to completion, even if it does take some considerable time for some installations, Trying to explain the ins and outs can be tiresome, but without our help i feel the clients tend to geet bogged down under the beurocracy.

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