There are a number of rules surrounding the receipt of grants. Only grants that relate to the purchase or installation of the heating system are relevant for the Domestic RHI. To see what is considered to be part of the heating system see the section on relevant parts in this guide.

If you received a grant that went towards the cost of purchasing or installing your heating system you will be required to declare the source and amount of funding that you received. If your grant covered the entire cost of purchase and installation, you will not be eligible for the scheme, see the section on making a financial contribution in this guide. Loans, such as a Green Deal loan, which you are required to repay are not grants.

Public Source

Only grants that are from a public source will need to be deducted from payments. Deductions will be taken from each of your quarterly payments spread over your participation in the scheme. Therefore if you received a grant for £1000 then £35.71 [1000/(7x4)] would be deducted from each quarterly payment. Grant funding deductions will be adjusted annually in line with changes in Retail Prices Index (RPI) or Consumer Prices Index ( Consumer Prices Index (CPI)open key term pop-up). A grant from public funds is any grant from a public body (or a person or organisation distributing funds on behalf of a public body) that went towards the costs of purchasing or installing the heating system. Ofgem considers funding through the National Lottery to be funding from a public body.

Grants that contribute to projects  

If you received a grant which was designed to give some freedom to choose how you spent the grant, such as a grant that could be used:

  • to contribute towards the cost of multiple heating systems
  • for the renovation of a building, some of which contributes to the cost of purchasing or installing a renewable heating system

This will still be counted as grant funding for the heating system (even if the money is also spent on other projects). If you used part of the general grant towards the cost of purchasing or installing the heating system, this money will be deducted from your payments. You will need to prove how much money went towards the heating system by providing invoices, correspondence or receipts.

Local Authorities

Local Authorities can use their general annual funding towards the purchase and/or installation of a heating system. This will not be considered to be a grant from public funds. If, however, Local Authorities receive a separate grant for the purpose of installing a heating system, or for other specific projects not covered by their annual budget, this may be considered to be a grant from public funds. We will review these types of situations on a case-by-case basis.


Consumer Prices Index (CPI)

Applications submitted for the Domestic RHI on or after 1 April 2016 have their tariffs adjusted in line with the Consumer Prices Index (CPI). The CPI is a measure of inflation and CPI rates are produced annually by the Office for National Statistics (ONS). Tariffs will be adjusted in accordance with CPI on 1 April every year. If you have grant funding that will be deducted from your payments you should be aware that the amount to be deducted will also be subject to CPI adjustment.

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