Extension To Non-Domestic RHI Scheme For Projects Already Underway
In a recent blog post we announced that the non-domestic renewable heat incentive (“RHI”) scheme was scheduled to close as planned in March 2021. However, due to the COVID-19 pandemic and the delays and uncertainty this has caused, the Government has listened to numerous industry voices, including Alto Energy, calling for mechanisms to extend the deadline in order to safeguard heat pump projects already underway.
6 Month Extension
The Department for Business, Energy and Industrial Strategy (BEIS) intends to make further changes to the scheme to give projects not eligible for a tariff guarantee a further 6 months to complete and register. This will give eligible projects until 30th September 2021 to finish and then register for RHI payments.
A previous update to the scheme had sought to safeguard projects, however only very large projects over 100kW were eligible to use the tariff guarantee mechanism. This new update will safeguard all non-domestic RHI projects, provided claimants can demonstrate that the project was already underway prior to the announcement on 17th August 2020.
How Will The Extension Work
Here is a summary of the key criteria for projects wishing to apply for an extension:
Not otherwise be able to use the existing tariff guarantee mechanism, i.e. heat pump projects under 100kW capacity
Before the notice publication date (17th August 2020) project applicants (i.e. clients) must be able to “demonstrate they have invested capital in either construction or pre-build development, as well as the time needed to complete and commission projects.” The meaning of this is as yet unclear, but it appears that clients will need be able to demonstrate to OFGEM’s satisfaction that there has been some expenditure on a potential project, such as pre-contract negotiations, design, evaluations, studies, reviews, etc. prior to 17th August 2020.
“Extension applications” can be made only during the month of March 2021 – not before or after. This will be a new form of application for accreditation with evidence requirements, to be specified in the regulations, to show that the project was under development prior to the publication of this notice. It is expected that the evidence requirements will be similar to those of a full application for accreditation with some key exceptions, such as removing the requirement for evidence that a plant has been commissioned. As part of the “extension application” there will be an additional requirement for evidence that the applicant had invested capital in the project prior to the publication of this notice, in order to ensure that this measure is targeted at those most in need of aid as a result of COVID-19 related delays.
Projects must be commissioned and final RHI applications lodged before 30th September 2021
“...demonstrate they have invested capital in either construction or pre-build development, as well as the time needed to complete and commission projects.”
Get In Touch
If you would like to discuss this latest announcement regarding the non-domestic RHI scheme, or indeed have any other queries about heat pumps or project funding, then get in touch with our team today.