The Non-Domestic RHI (Renewable Heat Incentive) Scheme for Biomass Boilers
What is the Non-Domestic RHI?
The Non-Domestic RHI is a UK Government initiative which helps businesses, the public sector and non-profit organisations meet the cost of installing renewable heat technologies, such as biomass boilers.
How the RHI works
RHI is paid per kilowatt hour (kWh) of heat you generate through your biomass boiler. How much RHI payment you receive depends on:
- the type of biomass technology you install
- how much energy the biomass boiler installation can produce (it’s capacity)
- how much energy you actually use
Small and medium-scale biomass RHI tariffs have 2 payment rates called ‘tiers’. You’ll be paid at the tier 1 rate up to a certain limit. If you use more energy than that, the rest of the energy is paid at the tier 2 rate. This tiering mechanism is designed to ensure that no-one is incentivised to waste heat under the RHI payment system.
Company A installs a biomass boiler with a capacity of 175kW. Because of the capacity, it’s on the ‘Small Biomass’ RHI tariff. The biomass boiler is used for 2,000 hours in 1 year. The RHI payments will be: 2.85p* per kWh (the Tier 1 rate) for the first 1,314 hours and 0.75p* per kWh (the Tier 2 rate) for the remaining 686 hours *RHI biomass tariffs are adjusted each year in line with inflation. See the current tariffs for non-domestic RHI
The Non-Domestic RHI will be subject to reform which had been planned to be introduced in Spring 2017. However, because of the recently called General Election these reforms have been delayed and it is now likely to be around September before these are introduced. This means that there are advantages to completing projects below 1MW as quickly as possible.
The main change is that the current approach – which sees different payment rates applied to different boiler sizes – will be replaced with a single payment structure across all boiler sizes. One other key element of the reform is that there will be a requirement to demonstrate planning permission has been secured prior to securing RHI. Click here to read our summary of the RHI reform.
Proposed reformed RHI rates
The new payment levels will be 2.91p per kWh for Tier 1 (up to the first 35% full load hours per annum (3,066 hours)) and then 2.05p per kWh (the Tier 2 rate) for anything utilised after that.
How do I apply for RHI?
There is a detailed process to go through to apply for RHI. At hwenergy we do this for the majority of our clients. We can also provide RHI applications as a stand-alone service. Once your application is successful (this can be backdated), you need to supply quarterly reports to Ofgem. You will then receive a payment every 3 months according to your heat usage, guaranteed for 20 years. As well as initial RHI applications, hwenergy provides a reporting service as part of our RHI Service Plans and Heat Supply Plans so we can take care of this for you.
Loans & capital financing
With the RHI providing an attractive quarterly payment for 20 years one of the key issues around undertaking a biomass project is the requirement to find the upfront capital funding. hwenergy can advise on several options for how this can be sourced. Please contact us to discuss which of these options is the most appropriate for you.
RHI and metering services
hwenergy undertake Independent Reports on Metering Arrangements (IRMA) and full RHI applications for clients. We are registered heat meter assessors via the HVCA and we have a dedicated administrative and engineering resource in the office undertaking applications, RHI schematics and heat loss calculations.
The boiler at our Fort William HQ was the first biomass installation in Scotland to be RHI accredited and we have undertaken more than 160 successful RHI accreditations for our clients to date, with a strong track record of dealing with complex schemes. We provide the IRMA, RHI schematics, heat loss calcs, meter installations (if required) and applications, all under one roof.