The next step

The BEIS response

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To further information on the future support for low carbon heat

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The future of low-carbon commercial heating support

Changes coming

In April 2020 the Department for Business, Energy and Industrial Strategy (BEIS) launched two consultations on how it will continue to decarbonise the heating of the UK’s buildings. The first looks at how it will futureproof the Non-Domestic Renewable Heat Incentive (RHI) Scheme which is scheduled to close on 31 March 2021. The second concerns how the government might offer future support for certain low carbon heating options.

Note. The Non-Domestic RHI is just one policy tool the government is using to meet its targets under the Climate Change Act which commits the UK to achieving net zero by 2050. This means that all emissions - whether from buildings or vehicles - must either be eliminated, captured or offset by the middle of the century.

About 20% of our carbon emissions currently come from heating buildings. From 2025 new-build developers will not be allowed to install gas boilers and will have to opt for greener options, such as heat pumps. But decarbonising heat that is generated in existing buildings remains a challenge.

What’s changing?

To recap, the Non-Domestic RHI offers financial incentives if you install and use renewable heat technologies in your business. Eligible installations receive quarterly payments over 20 years based on the amount of heat generated. Under the scheme you get a tariff guarantee, fixing the amount you will be paid for the clean energy you send back to the grid, from the point of commissioning. To benefit, you must submit an initial application, financial close evidence and proof of commissioning, which must be before 31 January 2021.

Guaranteed income

Prior to the Non-Domestic RHI coming to an end BEIS is proposing a new round of tariff guarantees with a lower eligibility threshold (see The next step ). To secure the guarantee, you only need to provide financial close information. Evidence of commissioning could be provided up to a year after the tariff guarantee is granted. The guarantee and the start of the applicant’s 20-year tariff period will commence on the receipt of financial close information, however tariff payments at the guaranteed amount will not begin until the point of commissioning.

Proposals

The consultation sets out the following two proposals in support of low carbon heat in the future: (1)The Green Gas Support Scheme , aimed at placing green gas on the grid via support for biomethane injection; and (2)The Clean Heat Grant Scheme , designed to support decarbonising heat in domestic and small non-domestic buildings via upfront grants for heat pumps and, in limited circumstances, biomass.

Tip. You will be able to access a £4,000 grant to help pay for the installation of new heat pumps under the new Clean Heat Grant Scheme (see The next step ).

For a link to the BEIS response and to further information on the future support for low carbon heat, visit http://tipsandadvice-environment.co.uk/download (EN 15.03.06).