Alto Energy | Blog

Introducing Assignment of Rights - MCS

In February 2018, the Department for Business, Energy and Industrial Strategy (BIES) laid regulations to implement reforms to both the Domestic and Non-Domestic Renewable Heat Incentive (RHI). One such amendment is Assignment of Rights, which will come into effect for the Domestic RHI on the 27th June 2018.

What is the Renewable Heat Incentive?

The Domestic Renewable Heat Incentive ("RHI") is a Government financial support scheme for renewable heating systems including ground source heat pumps and air source heat pumps. The scheme was launched in April 2014 and is administered by Ofgem, the energy regulator. 

Owners of heat pumps will be paid quarterly over a 7 year period for all of the eligible renewable heat generated by the heat pump in the property. Eligible renewable heat includes the energy required for heating the home and providing domestic hot water.

Payments are usually based on a deemed amount of heat produced by the heat pump, and are index-linked, meaning payments should increase year on year.

What is Assignment of Rights?

The Government is introducing Assignment of Rights so that householders can overcome the initial cost of a renewable heating system, and in doing so increase the uptake of ground source and air source heat pumps.

Assignment of Rights allows an "investor" to fund (or contribute towards) the installation of a ground source heat pump or air source heat pump system. Households and landlords are then able to assign their RHI payments to the investor.

How Does It Work?

From 27th June, applicants submitting an application for RHI, follows the regular registration process, however, they can choose to assign their rights to RHI payments to a third-party investor.

If a third-party investor enters an assignment of rights agreement with an applicant, they are required to be a member of a recognised consumer code, approved by the Chartered Trading Standards Institute under the Consumer Codes Approval Scheme. The two recognised Consumer Protection Codes for this purpose are the Renewable Energy Consumer Code (RECC) and Home Insulation and Energy Systems Contractors Scheme (HIES).

Third-party investors must successfully register with Ofgem, by meeting the eligibility criteria set out in the domestic RHI Regulations coming into force on 27th June, before they will be able to participate in the scheme.

Find Out More

Ofgem has published an initial factsheet for further information and they intend to publish more detailed guidance shortly.

If you are considering a heat pump for your own home, and want to discuss financing options, please get in touch with our team.