Non-Domestic Renewable Heat Incentive scheme - what we've achieved and what's next
Blog
Philippa Pickford
Director of Delivery and Schemes
Publication date
Scheme name
Non-Domestic RHI
Since the Non-Domestic Renewable Heat Incentive (NDRHI) scheme opened in 2011, it has acted as a financial incentive designed to encourage the uptake of renewable heating systems to help businesses, public sector and non-profit organisations meet the cost of installing renewable heat technologies. The main purpose of the scheme was to cut carbon emissions in Great Britain, in order to help the UK meet it’s 2050 net-zero target. Now that the scheme has closed to new applicants, we want to take the opportunity to reflect on some accomplishments of the scheme over the last 12 years.
Our role
Ofgem administer the NDRHI scheme on behalf of the Department for Energy Security and Net Zero, formerly known as the Department for Business, Energy, and Industrial Strategy (BEIS). Our responsibilities have included assessing and processing new applications to the NDRHI scheme and will continue to include the processing of amendments, reviewing of quarterly periodic data and issuing of payments accordingly, managing fuelling and sustainability requirements for accredited installations, ensuring participants comply with the NDRHI scheme requirements and the publishing of reports and data.
What we have achieved
To date the NDRHI scheme has supported 27,717 installations with a combined capacity of 5,980 MW through accreditation on the scheme. We have paid out a total of £4.99 billion to scheme participants for the 89 TWh of heat that has been generated since the scheme began. The amount of green gas injected into the grid currently totals 2.1 bn m3 over the lifetime of the scheme.
Solid biomass boilers have consistently been the most common technology type on the NDRHI scheme, making up nearly 78% of all accredited installations. However, since 2014, tariff degressions have led to changes in the make-up of applications being received. In 2021- 22, solid biomass boilers accounted for just over 64% of newly accredited capacity compared to over 95% in the first year of the scheme. Meanwhile, ground source heat pumps made up over 10% of newly accredited capacity over the same period, compared to around 3.5% in the first year of the scheme.
Lessons learned
The Non-Domestic RHI scheme was extended on two separate occasions. The scheme was initially due to close to new applicants on 31 March 2021. However, the Department for Energy Security and Net Zero (formerly BEIS) made the decision to extend the NDRHI scheme for applicants who had suffered significant delays due to the COVID-19 pandemic. Applicants who were successful in their application for an extension or a tariff guarantee were granted an additional year in which to make their full application for accreditation. The Department for Energy Security and Net Zero then extended the deadline for some applications by a further year to 31 March 2023.
What’s next
Ofgem are still on a mission to help the UK meet our 2050 net-zero target through our renewable energy and social programmes. The Green Gas Support Scheme (GGSS) provides financial incentives for new anaerobic digestion biomethane plants to increase the proportion of green gas in the gas grid. The scheme opened to applicants in England, Scotland, and Wales in November 2021 and applications for the scheme can be made until November 2025. Registered participants will receive quarterly payments over a period of 15 years, with payments determined by the amount of eligible biomethane that a participant injects into the gas grid.
We also administer the Boiler Upgrade Scheme (BUS) that opened to applications in 2022. The BUS supports the decarbonisation of heat in buildings, providing upfront capital grants to support the installation of heat pumps and biomass boilers in homes and non-domestic buildings in England and Wales. Acting on behalf of property owners, installers can apply for:
- £5000 off the cost and installation of an air source heat pump
- £5000 off the cost and installation of a biomass boiler
- £6000 off the cost and installation of a ground source heat pump, including water source heat pumps
£450 million of grant funding is available over three years from 2022 to 2025.
Ofgem will continue to work closely with government and industry to ensure the next chapter in low carbon heat benefits the wider market, the environment and makes a positive difference for energy consumers.