Government release response to The Domestic and Renewable Heat Incentive consultation

In February 2021 BEIS launched ‘The Domestic Renewable Heat Incentive: ensuring a stable scheme’ consultation which detailed the proposals to close the Domestic Renewable Heat Incentive (DRHI) to new applications on 31^st March 2022.

On 29^th October 2021, Government published their response to the consultation.

In the response Government confirmed the decision to close the DRHI to new applications on 31^st March 2022.

Key outcomes in Government response

The closure of the DRHI to new applications is not the only key outcome in the Government response, the consultation saw respondents make other requests to which Government has responded to. Below are some of the other key outcomes in Government response.

Closing the DRHI to new accreditation applications

• There will be no grace period after 31^st March 2022 to allow prospective applicants more time to apply. The scheme will be closed to all applicants at midnight on 31^st March 2022.
• To be successfully accredited onto the DRHI, a plant must meet the eligibility criteria which is:
  1. Be commissioned by the MCS certified installer, and,
  2. The accreditation application must be submitted to the scheme administrator by the date and time of the closure of the DRHI.
• The final payment period for the DRHI will end on 31^st March 2029.

Closing MMSP registration applications

• The scheme will be closed to new MMSP registration applications at midnight on 31^st March 2022. There has been no allocated budget to pay for additional MMSPs so keeping new MMSP applications open after the time specified above would incur operational costs for the scheme administrator.

AoR investor applications

• There will be no new accreditation applications to the DRHI after scheme closure, including via AoR.

Consumer protection measures

• Government will work with the consumer codes, MCS, the scheme administrator and other organisations in the lead up to the scheme closure.
• Government will publicise that MCS and the scheme administrator are focusing their audit and compliance programme on low carbon heating systems installed in the period before scheme closure. This is to deter fraudulent or mis-selling activities.
• MCS will mandate and enforce that all installations certified by their scheme must have an insurance backed warranty that is valid for at least 2 years. This is to mitigate issues where there are installation problems but the installer isn’t trading.
• The scheme administrator will publish guidance on the scheme’s closure as well as update their current guidance to reflect the policy proposals discussed in this response.
• Ofgem, MCS, HIES, RECC and BEIS will collaborate so that all communications to industry and consumers are consistent.
• All repairs and replacement on DRHI installations will have to be undertaken by an MCS certified installer. This is to ensure continued consumer protection on the scheme.

Scheme administration replacement parts

• Changes will be made to the regulations to ensure that the scheme administrator can obtain the information required to ensure ongoing compliance.
• An ongoing obligation will be added in the regulations that will require participants to notify the scheme administrator if a repair is carried out on the low carbon heating installation, or if any part of the installation is replaced. This will enable the scheme administrator to request any information that is required regarding the repair/replacement from the participant.
• If the remedial work is a simple repair, a light touch approach may be taken to ensure compliance.
• If a replacement product process should be used, the scheme administrator will send a Replacement Product Declaration Form to the participant to be completed by the MCS installer.

MCS installation, standards, calculators, and consumer codes of practice

• Regulations will be amended to allow MCS to update standards and calculators at scheme closure and for consumer codes to update their codes of practice.

Metering and monitoring service packages (MMSPs)

• The deadline for providing further information in relation to MMSP registration will remain at 12 weeks.
• The regulations will be amended to say that from scheme closure, further information must be provided within 12 weeks from the date of first request, instead of last request, provided that the last request is requesting new or different information.

Change of MMSP installer

• The regulations will be amended to add a process for the transfer of MMSP registration from one installer to another if the original installer exits the market before transferring its rights and obligations to another installer.

Data collection

• The regulations will be amended so that once MMSP participants have provided their consent, BEIS, the scheme administrator, or an agent nominated by either, will be allowed to request MMSP data directly from participants, installers, data storage platforms and data controllers.

Annual maintenance checks for biomass installations

• Compliance with the biomass maintenance standard will not be mandatory in the DRHI.

Above are some of the key outcomes HIES have taken directly from the Government response. If you would like to view the full response to the consultation, please click here.

What does HIES think about the Government response?

Faisal Hussain, HIES Chief Executive, comments:

“As a consumer code we are glad to see that there has been further thought into the consumer protection measures amongst the DRHI closure. We are always looking to transform consumer protection and ensure that consumer protection is seriously considered in the industry. The key with the closure will be the coordination between the various bodies to ensure consumers and installers have the correct information.”

Please note, the DRHI is now closed to new applications.

Background vector created by rawpixel.com – www.freepik.com