Non Domestic RHI – An overviewThe Renewable Heat Incentive was introduced by the UK Government as the first scheme of its type in the world. It is designed to encourage the use of renewable heat technologies by businesses, public bodies, not-for-profit organisations and householders. This strategy rewards organisations and individuals for contributing towards the target of 12% of all heating being generated from renewable energy sources by 2020. It is part of the overall ambition of reducing carbon emissions in order to limit the effects of climate change.
Phase 1 of the initiative is the Non Domestic RHI which provides financial incentives for 20 years for the installation of eligible, non-domestic renewable heat generators and to producers of biomethane. Organisations which may apply for Non Domestic RHI tariff payments include those operating in the commercial, industrial, not-for-profit and public sectors. This includes community heating projects, where a number of households come together to invest in a renewable energy heating scheme in order to share the heat and the Non Domestic RHI income. If an individual householder wishes to take advantage of the Renewable Heat Incentive, they should apply for the Domestic RHI scheme which provides financial incentives for up to seven years.
Renewable energy – you know it makes sense
When almost every day we hear of gas and electricity energy prices rising at a rate way above general inflation, it makes sense to take control of your organisation’s energy consumption. Installing renewable energy technologies and claiming tariff payments for 20 years with the Non Domestic RHI allows you to do that and at the same time you will:
- Save on your energy bills
- Make money from the renewable energy you generate
- Protect your budget against price rises
- Reduce your organisation’s carbon emissions
- Secure your future energy supply from sustainable sources
Summary of Eligibility Criteria for Non Domestic RHI
To take advantage of the Non Domestic RHI, the renewable technology installation must meet eligibility criteria for accreditation, or registration in the case of biomethane producers. In general terms the eligibility criteria are as follows:
- The applicant must be the owner of the installation or, if there are multiple owners (such as a community project) the applicant must have the permission to act on behalf of the others.
- The plant and equipment must satisfy the renewable energy heat technology requirements in terms of type and size, and it must have been new at the time of installation.
- The renewable heat technology installation must not provide heat solely for a single domestic property.
- The plant must use either liquid or steam in the delivery of heat.
- The installation must have been completed on or after 15th July 2009, unless it was a combined heat and power (CHP) installation generating just electricity prior to that date.
- Any other public grants received prior to accreditation under Non Domestic RHI have been repaid.
- The renewable heat technology and the equipment installer must have MCS (Microgeneration Certification Scheme) certification or its equivalent.
- The equipment must provide space heating, must heat water or must be involved in carrying out a process.
- The installation must have accurate metering in place to satisfy the requirements of renewable heat production.
- In the case of biomass boilers, air quality requirements must also be satisfied.
Non Domestic RHI – Summary of Eligible Technologies and Sizes
|Renewable Energy Technology||Criteria||Eligible Sizes|
|Solid Biomass||Must be designed and installed to generate heat from solid biomass fuel only||Any size but MCS accreditation is required for systems up to 45 kWth.|
|Ground Source Heat Pumps and Water Source Heat Pumps||Must extract naturally occurring energy from no more than 500 metres below the surface of the earth. Must have a CoP of 2.9 or more. Reversible heat pumps must only measure heating, not cooling.||Any size but MCS accreditation is required for systems up to 45 kWth.|
|Geothermal||Must extract heat from more than 500 metres below the earth’s surface.||Any size.|
|Solar Thermal||Solar collector must be evacuated tube or flat panel type.||Must be less than 200 kWth. MCS accreditation is required for systems up to 45 kWth.|
|Biogas Combustion||Heat must be produced from pyrolysis, anaerobic digestion or gasification. Cannot generate heat from solid biomass or landfill biogas.||Must be less than 200 kWth.|
|Combined Heat and Power (CHP)||The technology used must be geothermal, biogas, or solid biomass AND meet the relevant criteria.|
Producers of biomethane are treated differently to applicants for renewable heat technology participants of the Non Domestic RHI scheme because heat is not generated in the biomethane injection process. The Government decided that existing regulations and standards relating to biomethane production are sufficient to ensure that the requirements of Non Domestic RHI are satisfied. Consequently, the process refers to ‘registration’ for biomethane producers, rather than ‘accreditation’ as in the case of renewable heat technology participants of the Non-Domestic RHI scheme.
Non Domestic RHI – Summary of Tariffs and Payments
Owners of renewable heat technology installations which are eligible under Non Domestic RHI will receive quarterly tariff payments for 20 years from the date of accreditation of the installation. However, the Department of Energy and Climate Change (DECC) has announced that in order to control costs and encourage early take up, tariffs may be reduced over time for new applicants to the scheme. This is referred to as ‘degression reduction’ and Ofgem will publish quarterly tariff tables following the DECC’s quarterly degression announcement. Nevertheless, once an applicant has secured their tariff it will not be reduced due to cost control; it will only be affected by changes in the RPI.
Non Domestic RHI tariff payments are based on the actual heat output of the renewable heat technology plant installed. This is measured in kWth (kilowatt-hours-thermal) and the tariff rates are expressed as pence per kWth. Small commercial and medium commercial biomass systems have two tiers of tariff payments; Tier 1 rates apply up to 1,314 peak load hours per annum and Tier 2 rates apply above that.
Non Domestic RHI tariff payments applicable from 1st April 2014 are:
|Tariff Name||Eligible Technology||Eligible Size||Tier||Tariff Rate
(pence per kWth)
|Solid biomass, including solid biomass contained in municipal waste and Combined Heat & Power (CHP) systems||Less than 200 kWth||1||8.8|
|Medium Commercial Biomass||Solid biomass, including solid biomass contained in municipal waste and Combined Heat & Power (CHP) systems||200 kWth to less than 1,000 kWth||1||5.1|
|Large Commercial Biomass||Solid biomass, including solid biomass contained in municipal waste and Combined Heat & Power (CHP) systems||1,000 kWth and above||n/a||1|
|Small Commercial Heat Pump||Ground source heat pumps, water source heat pumps and deep geo-thermal||Less than 100 kWth||n/a||4.9|
|Large Commercial Heat Pump||Ground source heat pumps, water source heat pumps and deep geo-thermal||100 kWth and above||n/a||3.6|
|Solar Thermal Collectors||Flat plate and evacuated tube systems||Less than 200 kWth||n/a||9.4|
|Biomethane||Biomethane injection||All sizes||n/a||7.5|
|Biogas Combustion||Biomethane combustion||Less than 200 kWth||n/a||7.5|
Calculations of the amount payable under Non Domestic RHI will differ according to whether the installation is a ‘standard’ system or a ‘multiple’ system and are based on either the heat generated or the eligible heat used. Producers of biomethane have a separate payment calculation because no heat is generated in the biomethane injection process.
We have access to the largest database of installers of renewable energy technologies in the UK. Simply complete the form on this page and we will introduce you to accredited installation companies for you to discuss your requirements with. Your chosen installer will also offer assistance with the application procedure for the Non Domestic RHI. We do not charge you anything for this service and you are under no obligation to place an order with any of the installers that we introduce you to.
Please note that this is only a summary of the main points regarding the installation of renewable energy technologies and the qualifying criteria for the Non Domestic RHI. More information is available on the Energy Savings Trust website, the Ofgem website and from the Department of Energy and Climate Change (DECC).