What does the Queen's Speech mean for RHI? - Yorkshire Heat Pumps

Following the Queen's Speech this week, the implications of the new parliamentary agenda on the RHI scheme reforms remain unclear. At Yorkshire Heat Pumps, we're desperate to know what's going on!

Here at Yorkshire Heat Pumps, we have spent much of the week trying to understand what the future will hold for the Renewable Heat Incentive Scheme. Revised scheme regulations were due to be laid before Parliament when the snap General Election was called, but at that point Parliament was dissolved and the regulations effectively 'parked'. It was widely expected that the revised regulations would be laid before Parliament, subject to the approval of the new Minister, as soon as parliamentary business was resumed.

The passing of Article 50 and the commencement of Brexit negotiations appear to have changed all that. The Prime Minister has taken the rather unusual step of doubling the length of the next parliamentary session from one to two years to allow extra time for all the Brexit legislation to be fully debated and pass through the House of Commons and House of Lords.

With the emphasis in this two year parliamentary term firmly on Brexit, that leaves little time to debate all the other contenders. Following the Queen’s Speech, we have learned that the highly controversial plans to means-test the winter fuel allowance, do away with the triple-lock on pensions and extend selective education with a grammar school expansion programme have all been dropped while reforms to social care funding will be put out to consultation.

Critical for us and our customers is what will become of the proposed RHI scheme reforms, which do not appear in the legislative timetable for the next two years. These reforms included tariff uplifts for three of the four technologies covered by the scheme, the introduction of mandatory electricity metering on heat pumps, and perhaps most importantly, the introduction of heat demand limits. This last measure was to cap the number of kilowatt hours a homeowner could be paid for, rather than relying on the deemed heat demand figure from the property’s EPC to calculate RHI payments.

This change would stop those in the largest properties with the highest heat demands from taking an 'unfair' share of the RHI budget. This would effectively enable the finite RHI budget to benefit more homeowners.

Here at Yorkshire Heat Pumps, we have seen a number of customers accelerate their timetable for installing a heat pump or biomass boiler to beat the cap and secure the best possible RHI payments. We’re unsure whether that rush was necessary after all.

Industry commentators have yet to offer any opinion on this situation, so we suspect they, like us, are still trying to work out what's going on. We have submitted an inquiry to Ofgem asking for any clarification, but have yet to receive a reply. When we do, we will issue an update, but for now, we are struggling to know what advice to offer our customers and prospects about heat demand caps and tariff uplifts - which could be deal-breakers for some - and quoting for a project is tricky when we don't know whether to quote for electricity meters or not.

Watch this space.