Non-domestic RHI: What is it and how does it work?
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The Renewable Heat Incentive is also available for non-domestic properties, find out more about the non-domestic RHI scheme in this article.
Understanding Non-domestic RHI
The great hope for transitioning into renewable energy is no longer wishful thinking. The commercial RHI also known as non-domestic Renewable Heat Incentive (RHI) was launched in 2011 by the UK government to provide the much-needed incentives to the public sector, NGOs and other business to increase their uptake of renewable energy sources.
How does it work?
The non Domestic RHI gives a quarterly tax-free income to businesses for 20 years for the uptake of renewable heat systems. These quarterly payments are subjected to tiered tariffs with adjustment for inflation occurring annually. The adjustments are made on the bases on the changes in the consumer price index (CPI)
What are the payments based on?
Most of the domestic projects with ground heat pumps receive their RHI based on the observed heat consumption while other projects without ground source heat pumps, especially commercial installations, a metered system are used. While these are the most common scenarios, every individual installation has to be monitored and evaluated at the installation stage to confirm the precise configuration. For example, some projects employ a combination of both domestic and commercial installations and call for an evaluation at the design stage.
Non domestic rates criteria also expect:
Systems to be MCS accredited of they up to 45kWth
The ground source heat pumps to have a Seasonal Performance Factor (SPF) design of 2.5
The heat pumps used must be in a position to naturally extract energy.
Heat metering system to be used in commercial projects or where more than one heat pump is installed.
The capacity of the ground source heat pumps should be specified and design conditions well-documented.
The ground source heat pumps must not extract energy beneath 500m of the earth's surface.
Non-domestic RHI scheme covers eligible technologies falling under the following.
Biomethane This is perhaps one of the most direct technologies covered by the non-domestic RHI scheme as no further accreditations are required upon registration. Payments start to flow in without necessarily having to undergo the application process.
CHP (Combined Heat and Power) This is automatically eligible as long as the fuel used is eligible in the RHI scheme. Meeting CHPQA standards is not needed but the standard of the fuel must be met.
Water Source Heat Pumps These are a marvellous bit of technology for harnessing energy in a body of water on your commercial property. They are included in the non domestic RHI scheme under the same consideration and funding as the ground source pumps.
Deep Geothermal Requiring no MCS accreditation scheme, these large installations also receive similar funding to the water and ground source heat pumps.
Solar Thermal Systems under 200kW are eligible for the RHI funding.
How do I apply?
After installation, the system owner has to go through the application process of the non-domestic RHI. When ready for the process, the owner must create an online profile with an RHI provider.
What documents do I need for the application?
Before application relevant and legal documents are needed to qualify for the 20-year funding. Some of these documents include:
Evidence of installation The details of installation such as date, installer and the serial number of the heat pump are required for verification. Receipts, invoices or commissioning reports and pictorial evidence of the serial number must be provided. Should the heat pump be higher than 45 kW and not MCS accredited, the installer must give MCS-approved heat pump calculations.
Proof of Consent There should be evidence from the owner or any other authorised signatory that indeed the business is applying for the RHI scheme.
Bank details Physical and online evidence of bank account details must be provided.
Non-domestic status evidence Commercial premises must provide business rates bills, council tax bills or a letter from the local council. For those projects that have multiple dwellings, pictorial evidence is needed to prove that indeed the dwellings do exist.
Information on any installation grants This is especially needed during the application process as the RHI scheme cannot double fund what was already funded by the government. For example, biomass funded under a different funding initiative will not be eligible for the RHI funding.
Meter certification from the manufacturer Every meter model must submit the certification from the manufacturer proving it meets the set standards. These certifications must be presented with photographic evidence of the running meter as well as its reading.
What ongoing obligations do I need to keep meeting?
The payments run for 20 years so it is not applied and forget kind of arrangement. The payments will continue flowing as long as the systems are well maintained and meet regular inspection criteria by Ofgem.
That's awesome, where exactly do I apply?
If you are interested in getting RHI for your projects or business, you can make an application at Ofgem. You will be asked to provide the documentation highlighted above. Note, any grants received during the installation phase automatically make you ineligible for the RHI.