18 December 2020: Non domestic RHI - changes to tariff guarantee and COVID extension application budget caps
Updated 3 April 2022
Applies to England, Scotland and Wales
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This publication is available at https://www.gov.uk/government/publications/changes-to-the-renewable-heat-incentive-rhi-schemes/changes-to-ndrhi-tariff-guarantee-and-covid-extension-application-budget-caps
Tariff guarantees
The 30 June 2020 government response provided details of a third flexible allocation of Tariff Guarantees (TG3) on the non-domestic Renewable Heat Incentive Scheme (NDRHI). This included details of budget allocations within TG3 for individual technologies or groups of technologies.
TG3 opened for applications on 20 July 2020, and new applications for TGs are considered against the available budget for the applicable technology or group of technologies. The budget allocation for any current or future financial year may be increased from 1 February, May, August or November in each year.
The department reviewed the latest deployment data and forecasts, and decided that the budget allocation for ground and water source heat pumps will be increased from 1 February 2021.
Ground and water source heat pump applications that are currently in the queue, or any new applications that are submitted and go into the queue, will be processed from 1 February if this increased allocation means there is sufficient budget to cover their expected payments in 2021/2022 and 2022/2023.
Applications in the queue may also be processed if further budget becomes available as a result of applications that were previously counted towards the budget being withdrawn or rejected. Should such a situation occur:
- the earliest queued application would be reviewed and if sufficient budget were available, the application would proceed
- if the available budget was insufficient, the application would be placed back in the queue and the next earliest application considered
This may mean that a large application could remain in the queue while smaller applications could proceed.
The revised budget allocations in place from 1 February 2021 will be as follows:
| Budget allocation (£m) | 2021/2022 | 2022/2023 |
|---|---|---|
| Biomethane | 5 | 12 |
| Ground and water source heat pumps over 100 kW | 17 | 28 |
| Other technologies (solid biomass CHP, geothermal, solid biomass over 1 MW, biogas over 600 kW) | 7 | 9 |
We will provide notice by 1 January 2021 of any further changes to these budget allocations.
COVID-19 Response
The 5 November 2020 notice published details of a mechanism to aid non-Tariff Guarantee (TG) eligible projects impacted by COVID-19 related delays that had invested resource into project development prior to the original 17 August 2020 announcement. This mechanism provides these projects with an additional 12 months after scheme closure (on or before 31 March 2022) to commission and submit a properly made full application for accreditation, providing that they submit a properly made ‘extension application’ to the scheme during a window in March 2021.
As with the third allocation of Tariff Guarantees (TG3), technology specific budgets were set, though these are distinct from TG3. These were set in line with the technology profile of recent NDRHI deployment trends, to ensure that no one individual technology can utilise an oversized portion of the total budget for this measure and block other technologies from having fair access to this funding.
The department has reviewed latest deployment data and forecasts and decided to increase the total annual budget for these applications and the technology-specific budget for ground and water source heat pumps. The amended annual budget for NDRHI extension applications is as follows:
| Technology | Budget p/a FY22/23 onwards (£m) * |
| Total | 6.9 |
| Biomass (<1MWth) | 2.8 |
| GSHPs (<100kWth) | 3.6 |
| All other non-TG eligible technologies | 0.5 |
*As accreditations will be staggered over the course of the extension period, spend for FY 2021/2022 will be below 2022/2023 levels. As such, the budget caps used reflect a full year’s worth of NDRHI spending on these installations.
All other details of this mechanism, including evidence requirements, remain as set out in the Changes to NDRHI support and COVID-19 response published on 5 November 2020. The department will continue to assess deployment forecasts and announce any further changes to these budgets in due course.