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Many landlords are breaking the Renewable Heat Incentive rules and could lose their funding
The Domestic Renewable Heat Incentive (RHI) pays landlords for using renewable heat but you need to be careful to follow the rules, warns Luke Bailey
The Domestic RHI is a government financial incentive to promote the use of renewable heat.
It is administrated by the Office of Gas and Electricity Markets (Ofgem) and contributes to the UK’s responsibility to meet its target of 15% renewable heat generation by 2020.
People who join the scheme and stick to its rules receive quarterly payments for seven years for the clean, green renewable heat their system produces.
There are many social landlords on the Domestic RHI helping to generate renewable heat. However, through lack of awareness and understanding of the scheme rules, many of them are failing to meet their full responsibilities.
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This can have major financial implications for the social landlords, including the recovery of RHI payments for periods of non-compliance.
If you are a social landlord that is a member of the Domestic RHI, there are some easy actions you can take to ensure you meet your ongoing obligations on the scheme and make sure you continue to get paid.
“There are many social landlords on the Domestic RHI… many of them are failing to meet their full responsibilities”
This list is not exhaustive but covers the main causes of non-compliance among social landlords:
- Make sure you know who your ‘authorised representative’ is, as well as any appointed administrators. When organisations join the Domestic RHI, they are asked to nominate a person who can interact with Ofgem on their behalf. These people should be responsible for notifying Ofgem of any matters they need to know about. If your current authorised representative or appointed administrators no longer work for your organisation, it’s important you contact Ofgem to authorise a new one. Authorised representatives and appointed administrators must be aware of their duties – Ofgem provides guidance for them to refer to.
- Ensure that all information is kept which proves the continued compliance of each of your heating systems. This includes the Microgeneration Certification Scheme (MCS) certificate and accompanying compliance certificates, and any paperwork on commissioning and repairs, including service reports, plus the property’s Energy Performance Certificate and accompanying site notes, utility and council tax bills, as well as tenancy agreements for the duration of your RHI accreditation. It also includes fuel receipts, if any of your heating systems are biomass boilers. This is to demonstrate that the fuel is Biomass Sustainability List registered and sustainability criteria are met.
- Notify Ofgem if you merge with another social landlord. This is allowed on the Domestic RHI, but if not declared it would look to Ofgem as though you have sold the property and heating system but are still getting RHI payments, which is not allowed. Also aim to make a notification in advance of any mergers, so all the legal paperwork can be provided upfront to assure Ofgem of the ownership status.
Remember, that as a participant you have to stick to the scheme rules for the whole seven years that you are receiving payment.
Ofgem runs a full audit programme of checks and visits. Anyone can be selected at any time and Ofgem authorised auditors may visit the property once selected.
It’s your responsibility to make sure that you and your tenants stay compliant, and that your tenants allow access to the property in case of a site audit.
Ofgem may sanction a social landlord where refusal of entry to a property under audit is considered unreasonable. If you have installed any biomass boilers or stoves, your tenants must also keep fuel receipts for the seven years you are on the scheme as they may be requested as part of any audit checks.
Luke Bailey, senior policy manager, Ofgem
