September 24, 2012

Non-domestic RHI

The Non-Domestic RHI Scheme supports renewable heat installations in business, industry and the public sector as well as district heating schemes. It has been open for applications since November 2011.

The Non-Domestic RHI Scheme currently supports the following technologies:

  • biomass
  • heat pumps – ground source, water source and deep geothermal
  • all solar thermal collectors
  • bio-methane and biogas

RHI payments are made to the owner of the heat installation over a 20 year period and tariff levels have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems. The scheme is administered by Ofgem. More information is on the Ofgem: Renewable Heat Incentive (RHI)[External link] web page. The current tariffs for the Non-Domestic RHI technologies are in the table below:

Tariff name Eligible technology Eligible sizes Tariff level (p/kWh)
Small biomass Solid biomass including solid biomass contained in municipal solid waste (incl. CHP) Less than 200 kWth 8.3
(tier 1)
(tier 2)
Medium biomass 200 kWth and above; less than 1,000 kWth 5.1
(tier 1)
(tier 2)
Large biomass 1,000 kWth and above 1.0
Small heat pumps Ground-source heat pumps; water source heat pumps; deep geothermal 100 kWth and above Less than 100 kWth 4.7
Heat pumps 100 kWth and above 3.4
All solar thermal collectors Solar thermal collectors Less than 200 kWth 8.9
Biomethane and biogas combustion Biomethane injection and biogas combustion, except from landfill gas Biomethane all scales, biogas combustion, except from landfill gas 7.1

Since the scheme opened in 2011 DECC has run two consultations on changes to the scheme in relation to integrating budget management into the scheme, introducing new air quality and biomass sustainability standards and making improvements to respons to the initial months of the scheme being operational. They can be found in the Consultations area of this site.

We will be consulting on proposals for expanding the existing scheme to include additional technologies, later in September 2012.

The timetable for delivering the changes to the Non-domestic scheme can be found on the Delivery timeline web page.

Budget management for the RHI

It is essential that the RHI is financially sustainable and that deployment of renewable heat continues to be good value for money to the taxpayer. The RHI is funded directly from Government spend and has been assigned annual budgets for the four years of this Spending Review period. Budgets were set based on the estimated trajectory of growth needed to achieve 2020 renewables targets. Further information on what we are doing to ensure we stay within budgets for the non-domestic RHI can be found on the Budget management web page.

In June 2012 we announced a stand-by mechanism for budget management that would suspend the RHI to new entrants until the next financial year should estimated spending reach a level where the budget could be breached. This will be in place until March 2013 when it will be replaced by a more sophisticated, long term mechanism.

Non-Domestic Scheme uptake and spend

To provide greater transparency and certainty for potential scheme applicants, members and investors, we committed to provide a weekly forecast of estimated spend for the 2012/13 financial year (based on applications received to date). This information will enable everyone with an interest to monitor the progress towards the trigger point which would activate the Stand-by Mechanism.