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The Renewable heat incentive (RHI) is set to close to new applicants as of March 31st 2021. Many large scale projects can take from six months to a year from project start to completion. Isoenergy’s Jason Blanchard explains how the tariff guarantee can help protect your investment in renewables, effectively securing the rate of return before fully committing to installing the system. 

For large non-domestic installations of renewable heating technologies it is possible to reserve a slice of the RHI fund capacity. It will also protect the amount you receive per kWh generated from periodic degressions in tariff rates between signing up for the guarantee and applying for the RHI when the system is installed. Without the guarantee, you just get what the rate is when the project is fully installed. This is an unattractive risk for commercial organisations.

The technologies and size of projects that are eligible for tariff guarantees are detailed below.

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The process of obtaining tariff guarantees has three stages. The initial two stages seek to ensure that the project meets numerous viability criteria. Stage one focuses on technical viability and requires assurances that the renewable heat generated will be used for eligible purposes and that planning permission has been granted.

Stage two of the process is focused on the financial viability of the project and involves a financial audit of the owner of the system to ensure sufficient funds are available and have been committed for the whole of the installation cost. This audit must be carried out by an external auditor and meet criteria set out by Ofgem.

Stage one and two can be completed before the project starts on site.  By the end of stage two, the RHI tariff is guaranteed by Ofgem and will be honoured for a set period by which time stage three must be completed.

Stage three is the actual non-domestic RHI application process, when the normal criteria for the RHI need to be met.

Ofgem has provided some guidance on the process in the form of a factsheet, however should you think you have a project that could fulfil the requirements and would like to explore the process of tariff guarantees further, please contact one of our consultancy team on 01293821345.

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