On the 3rd March 2016, the Government released a consultation document outlining proposals for the reform of the Domestic & Non-Domestic Renewable Heat Incentive (RHI).

Whether you are an existing RHI participant, or in the early stages of considering an RHI eligible installation, these proposals may affect you. The proposed changes will be implemented in April 2016 and Spring 2017. 

Here is a summary of the changes that will be implemented in April 2016:

• Degression will still operate as the main cost control mechanism. However, a single budget cap will apply from April 2016 for both domestic and non-domestic schemes. Once the cap has been reached, both schemes will close until at least the next financial year.
• Future installations (accredited after 1st April 2016) will have annual tariff inflations linked to the Consumer Price Index, rather than Retail Price Index.
• There will be an alignment of the sustainability requirements of the RHI and RO schemes, and biogas plants over 1MW will be allowed to comply with RO to meet the RHI sustainability requirements.

From Spring 2017, ministers will have the power to close both schemes for the current financial year, based on how close the expected spend is to the total budget. There will be monthly updates of progress towards the budget cap, and there will be 21 days’ notice given before closure of the scheme to new applicants (although they do have the option of giving no notice in extreme circumstances).

Once closed, the scheme would ordinarily be re-opened at the start of the next financial year.

More details, including further key points being implemented in spring 2017 and how you can join us in responding to the consultation, are outlined here.