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Renewable Heat Incentive Update: Introduction to assignment of rights

On 7th February 2018, the Department for Business, Energy and Industrial Strategy (BEIS) laid regulations to implement reforms to both the Domestic and Non-Domestic Renewable Heat Incentive (RHI) schemes before Parliament. On 27th June 2018, Assignment of Rights will come into effect for the domestic Renewable Heat Incentive (RHI).

What is assignment of rights?

The government is providing an option to help householders to overcome the barrier of the initial cost of a renewable heating system and improving access to the scheme for those consumers who are less able to pay. Assignment of Rights will allow homeowners who have successfully applied for their renewable heating installation to be accredited to the RHI to assign their RHI payments to a third-party investor that has funded the purchase, installation and maintenance for all, or part, of their renewable heating system. The householder will still own the heating system.

The scheduled changes to the Domestic RHI

  • From 27th June, applicants submitting an application for RHI, follows the regular registration process, however, they can choose to assign their rights to RHI payments to a third-party investor.
  •  If a third-party investor enters an assignment of rights agreement with an applicant, they are required to be a member of a recognised consumer code, approved by the Chartered Trading Standards Institute under the Consumer Codes Approval Scheme. The two recognised Consumer Protection Codes for this purpose are the Renewable Energy Consumer Code (RECC) and Home Insulation and Energy Systems Contractors Scheme (HIES).
  • Third-party investors must successfully register with Ofgem, by meeting the eligibility criteria set out in the domestic RHI Regulations coming into force on 27th June, before they will be able to participate in the scheme.

It is intended that Assignment of Rights replaces the current third-party financing models and that any installations funded by third parties who apply for accreditation to the domestic RHI on or after 27th June must use the Assignment of Rights model. Installations successfully accredited to the domestic RHI before this date will be unaffected by this change.

Ofgem has published an initial factsheet for further information and intends to publish more detailed guidance this month. RECC and HIES will also be publishing guidance for their members.