RHI 2018 Tariff Guarantee Process

The Renewable Heat Incentive is a government scheme providing financial support to non-domestic renewable heat generators and producers of biomethane.

A tariff guarantee secures a tariff rate for applicants prior to their installation being commissioned and fully accredited on the RHI. The first companies to be approved for the tariff guarantee were EnviroSense clients. 

Do I qualify?

Tariff Guarantees are available for solid biomass CHP, geothermal and biomethane applications of all sizes, as well as for biomass over 1MWth, biogas over 600kWth and ground source heat pumps and water source heat pumps over 100kWth.

How do I apply?

There is a 3-tiered application process to Ofgem for tariff guarantees;
1. Stage 1 – Application Submitted
2. Stage 2 – Financial Close Information
3. Stage 3 – Full Application Details

Download Ofgem Guide To Tariff Guarantees

What is “financial close”

This has no interpretation within the Renewables Heat Incentive 2018. The meaning is described in Part 3, Article 33 as, “the date on which the applicant has entered into all financing agreements in relation to all the funding required for the construction of the proposed plant, or the production and injection of biomethane“.

At completion of Stage 1, applicants receiving a Provisional Tariff Guarantee Notice (PTGN), will have 3 weeks to supply necessary evidence that they have reached financial close. Applications failing to provide evidence within 3 weeks will be rejected.

Financial close evidence needs to prove two main factors;

1. That funds are available to cover the complete construction of the proposed project.

2. That these funds are formally committed to the project.

How do I obtain financial close evidence?

That’s where we come in. Financial close evidence must be verified and supported by a report from an independent auditor who is not a ‘connected person’ (this means any person connected to the applicant and/or investors as defined in section 1122 of the Corporation Tax Act 2010).

How long is the financial close process?

Ofgem have not set time frames for responding to applicants for Stage 1. The verification work can be performed in 1 to 2 days. The most practical process is to:

1. Apply for the Provisional Tariff Guarantee Notice

2. Whilst the above is in application, contact a firm that can conduct the audit (EnviroSense) and liaise to plan the verification work. There is nothing preventing the verification work to commence prior to receiving any acknowledgement of a pending application response.

3. Prepare the information to be verified well in advance to maximise available time.

4. Submit the Financial Close information immediately after a request from Ofgem in order to maximise time available within the 3 week period.

What happens next?

Once financial close evidence has been approved by Ofgem, the applicant will move to stage 3.

With a tariff guarantee confirmed (pending conditions), the final stage is for the installation to be commissioned (within 183 days of the estimated commissioning date and before 31 January 202) and for the final details of the application to be completed in the application form and submitted to Ofgem. A Stage 3 submission cannot be submitted before this expected commissioning date otherwise the applicant will not receive the tariff guarantee rate.

Do contact us with any questions on what information is required to demonstrate financial close