This page will contain financial information about heat pumps.
We intend to produce buying guides, cost comparisons, reviews and information about the various grants and incentives, such as the Renewable Heat Incentive (RHI).
There were some changes to the RHI in 2016. Below is a summary of the changes from Ofgem. This illustrates the type of changes that can occur and what you might expect to see over time.
1. Green Deal Assessments
At that time there was a requirement for applicants to the domestic RHI to have a Green Deal Assessment (GDA). This was to provide them with information about the efficiency measures that were suitable for their homes. This initially applied to all applicants but Registered Social Landlords (RSLs) were made exempt from this requirement in February 2015.
It was announced in July 2015 that there would be no further funding to the Green Deal Financing Company. This, alongside consistent feedback that a GDA is an unnecessary burden to scheme participants, has resulted in a change to the Regulations, removing the need for a GDA as an eligibility requirement for the Domestic RHI. Applicants still needed to meet minimum insulation requirements of loft and cavity wall insulation and provide a valid Energy Performance Certificate (EPC) that was no more than 24 months old.
2. New Build Properties – 183 Day Occupancy
The domestic RHI required that if a property was occupied for less than 183 days, in a 12 month period, a heat meter must be installed to measure renewable heat use and determine payments, instead of payments being based on the annual heat demand specified on the property’s EPC.
That occupancy requirement ensured that the Domestic RHI delivered value for money for the taxpayer by not overpaying for renewable heat systems installed in properties that were not continuously occupied (for example, second homes).
This resulted in the unintended consequence of eligible new self-builder properties having to wait 183 days prior to scheme application or installing heat meters as they were unable to provide evidence that they had lived in their homes for at least 183 days in the previous 12 months.
To overcome this, government changed the regulations to make eligible new build properties exempt from the 183 day occupancy requirement in the 12 months prior to application to the scheme. Thereafter, those participants would be subject to the standard ongoing obligations which included the annual declaration that the property has been occupied for 183 days or more in the last 12 months.
3. Tariff Indexation
Tariffs in both the Domestic and the Non-Domestic RHI were subject to an annual adjustment in line with inflation to take into account changing prices in the economy. The indexation rate used historically had been the Retail Prices Index (RPI).
RPI was no longer classified as a National Statistic in recent years, therefore, for all applications accredited on or after 1 April 2016 tariff adjustments were linked to the Consumer Price Index (CPI). CPI was already widely used across Government, for example for the uprating of pensions, wages and benefits. Existing scheme participants at that time had to continue to have their tariff linked to RPI.
4. Degression Triggers
Spending in the RHI scheme was controlled through the degression mechanism. This operated by applying an automatic reduction to a technology tariff if pre-determined expenditure trigger points were exceeded. Expenditure was assessed every 3 months.
Individual technology trigger points for the scheme were set out in the Regulations. In 2016, the Regulations only specified triggers up until the 31 January 2016 assessment date; a further assessment against expenditure became due 30 April 2016, which informed any tariff reductions that took place on 1 July 2016. In these Regulations government updated the expenditure trigger points for the scheme until the 31 January 2017 assessment date.