People with renewable heating systems installed since 15 July 2009 may have to wait to apply for the domestic renewable heat incentive (RHI). Last week the government announced its plans to phase the process.
Phasing will enable those who installed without support from the renewable heat premium payments (RHPP) to apply as soon as the scheme launches. Three months later those who applied for their RHPP voucher before 20 May 2013 can apply. Six months after the scheme starts, those who got the higher rates of RHPP can apply. All legacy applications must be completed in the first year of the scheme. New applicants can apply as soon as their system is commissioned, and must appy within a year of the commissioning date.
- Months 1-3 – New applications (installs after April 2014) and those who have not received an RHPP Voucher
- Months 4-6 – As above and those who have received an RHPP Voucher pre 20/05/2013
- Months 7-12 – All installations including those who have received an RHPP Voucher pre 01/04/2013
- Month 12 onward – New applications only
The reason given for phasing is to manage the potentially large volume of applications and prevent a backlog. Given the tortuous backlog that dogged the introduction of the feed-in tariff, and caused much consternation to applicants, it makes sense.
Tariff reduction in the RHI
The government also announced its plans to manage the renewable heat incentive budget. Unlike the feed-in tariff, the RHI is funded out of general taxation, and budgets are assigned as part of the spending review. This means that “budgets are set for each year and are not flexible”.
Like the feed-in tariff, the budget will be managed by degression – the tariff paid to new entrants will be lowered (degressed) as the amount spent on the scheme reaches triggers set out in advance.
Government will check every quarter to see whether a trigger level of spending has been hit. If it has, the tariff will go down for new applicants. If not, it will remain the same. There will be one month’s notice of any tariff reduction. The government says: “We consider that one month is long enough to allow the majority of those with complete or almost complete installations to submit the application to Ofgem.” When a trigger is hit, the tariff will reduce by 10 per cent (or 20 per cent if it hits a super trigger).
It will work like this:
- Deployment to 31 July provided to DECC by Ofgem
- Analysis of data – have triggers been met?
- By 1 September tariff change notice of 1 month issued
- 1 October – new tariffs come into effect
The above information has been taken from the Yougen website. You can find more information from the Yougen site by clicking here http://www.yougen.co.uk/