Domestic Renewable Heat Incentive: ensuring a stable scheme
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Detail of outcome
March 2022: Closure of DRHI scheme, and its successor, the Boiler Upgrade Scheme
Read this update on the closure of the DRHI scheme, and its successor, the Boiler Upgrade Scheme.
Based on the consultation responses, our work with the scheme administrator, and consideration of wider government policy objectives, we intend to proceed with the majority of the proposals outlined in the consultation.
The government response states our intention to:
- close the Domestic Renewable Heat Incentive (DRHI) to new applications to the main DRHI scheme (accreditation applications), and to new Metering and Monitoring Service Package applications (registration applications). Both close at midnight on 31 March 2022
- amend the regulations for replacement of parts of plants, annual declarations, and occupancy to improve scheme administration
- provide the Microgeneration Certification Scheme and the consumer codes with the opportunity to update their standards, codes of practice, and other documentation that are mentioned in the regulations
- amend the metering requirements and Metering and Monitoring Service Package arrangements, so they are simpler and easier to administer
- introduce a requirement that all solid biomass used on the DRHI meets the fuel quality requirements that are being introduced to the Biomass Suppliers List
- reduce the publishing and reporting requirements after scheme closure
17 December 2021: Update on potential further amendment
In this consultation, we asked respondents to suggest any further changes to the scheme that we had not included in the original consultation. We received a suggestion on an administrative change concerning change of ownership that we consider would be sensible to implement.
The current regulations specify that, where there is a change of ownership of an installation, the new owner must notify the scheme administrator (Ofgem), who must update the central register and send the new owner a statement of eligibility before RHI payments can be made. RHI payments are currently calculated from the date that these steps are completed. If there are delays in the scheme administrator’s processing of the change of ownership, there are then delays in the new owner receiving their RHI payments. As a result, this process is a cause of complaints and review requests from DRHI participants to the scheme administrator.
In the government response we stated that we were considering whether to amend the regulations to allow RHI payments to be calculated from the point of notification by the new owner, rather than the date that the scheme administrator completes the change of ownership process. RHI payments would still be released at the point of completed processing, however the amount would be backdated to the point of notification.
We asked for views and comments on whether to implement this amendment to be sent to us by 30 November 2021, but received no comments.
Given the amendment will benefit scheme participants, we intend to proceed with this change and will implement it through a change to the regulations at scheme closure.
Boiler Upgrade Scheme and Heat and Buildings Strategy
The closure of the DRHI does not mean the end of government support for decarbonising domestic heating. We published the government response to the Clean Heat Grant scheme proposals on 19 October 2021. Now renamed the Boiler Upgrade Scheme, the £450 million successor scheme to the DRHI will provide £5,000 and £6,000 grants as part of more than £3.9 billion of new funding to decarbonise heat and buildings.
Alongside that we published the Heat and Buildings Strategy which sets out our long term plan for decarbonising heat in buildings. For further information on the government’s plans to decarbonise heat and drive down costs, read the press release Plan to drive down the cost of clean heat.
Detail of feedback received
We received 20 responses to the consultation from businesses, trade bodies and other organisations. In general, the responses were supportive of the amendments that we proposed, with a variety of suggestions and recommendations highlighted by respondents.
Original consultation
Consultation description
This consultation sets out proposals for the closure of the domestic Renewable Heat Incentive (DRHI) scheme to new applications on 31 March 2022. Last year the government extended the deadline for new applications to the DRHI to 31 March 2022, and the scheme will close, with the last payments being made, in 2029.
The proposed reforms seek to:
- simplify scheme administration and operational delivery
- improve the consumer experience for existing participants
- ensure robust management for the remainder of the DRHI payment term
- deliver ongoing value for money to the taxpayer
Proposals include:
- allowing for updated versions of installation standards, calculators, and consumer codes of practice
- reducing the amount of reporting that BEIS will publish about the DRHI after it closes
- amending some of the processes around metering for payment, and metering and monitoring service packages (MMSPs) to make administration more efficient and flexible
- introducing mandatory annual maintenance checks and raising fuel quality standards for biomass installations, bringing the DRHI in line with recommendations in the April 2020 government response to the Renewable Heat Incentive: biomass combustion in urban areas consultation
The consultation is open to everyone, but we would like views in particular from industry, stakeholders and representative groups, installers, consumer groups, and the general public.
See the BEIS consultation privacy notice.
Please do not send responses by post to the department at the moment as we may not be able to access them.
Documents
Last updated 4 March 2022 + show all updates
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Added link to note about DRHI closure, and its successor, the Boiler Upgrade Scheme.
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Update on the suggested administrative change concerning change of ownership.
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Government response published. Further comments requested by 30 November 2021 regarding backdating RHI payments when a change of ownership occurs.
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Impact assessment added.
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First published.