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Author Topic: RHI assignment  (Read 376 times)
djs63
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« on: October 26, 2020, 07:56:44 AM »

Hi, my sister-in-law is thinking about installing a ashp via company who would have assigned rights to the RHI monies. It is not clear to me which monies they would receive. Does anyone have experience of this process please?
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Countrypaul
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« Reply #1 on: October 26, 2020, 09:12:10 AM »

I have just got the RHI for our ASHP and my first thought with your question is that it sounds like the PV rent a roof scheme.

The RHI should pay for the cost of installing and routine maintenance of the ASHP over a period of 7 years (index linked I believe). Do if your sisters ASHP install cost say 14000 there would be a payment of 500 per quarter.

My guess is that the company will be offering to install it very sheaply (free?) on the basis they get the RHI payments and your sister just pays for the cost of running it and any repairs. I suspect it will be like the PV rent a roof scheme, very expensive to buy yourself out of, and a nightmare if she wants to move before the 7 years is up.  This is just my guess - obviously you would have to check the details.

Can she get the green scheme grant - there was a thread on this recently, as that would reduce the capital cost for her but also the RHI payments (if the green scheme grant was 7,000 the RHI would only pay her for the remaining 7,000).
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marshman
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« Reply #2 on: October 26, 2020, 09:16:40 AM »

Hi, my sister-in-law is thinking about installing a ashp via company who would have assigned rights to the RHI monies. It is not clear to me which monies they would receive. Does anyone have experience of this process please?

It works in pretty much the same way as it does for the FiT payments for renewable energy generation.  The property owner effectivly "signs over" the quarterly RHI payments to a third party.

In the case of the RHI, I believe that this is only allowed if the 3rd party is an investment company or installer who has financed the original installation and gets assigned the quarterly payments as a means of paying back the "investment".

Full details are here:

https://www.ofgem.gov.uk/publications-and-updates/essential-guide-assignment-rights

Basically it sounds as if the company your sister-in-law is speaking to is offering to pay for the install in return for assignment of  quarterly payments. In some ways it is similar to the "rent a roof" schemes for solar PV.  I would advise proceeding with a great deal of caution because a badly designed and executed heatpump install can end up being very costly in terms of electricity running costs and your sister in law could then be stuck with an expensive to run underperforming system for 7 years under a legally binding contract. The installation won't have much incentive to sort it out as they will get the RHI payment as long as the system is functioning. There are supposed to be safeguards through the MCS scheme and the RHI application process which involve design calculations etc. which should ensure good system design, but an unscrupulous company can easily "fudge" these, There are plenty of stories of people that have poorly performing systems. Having said all that, with a good system properly designed and installed, the RHI payments could cover the installation costs in as little as four years and provide a system with very low running costs - which is the case with my system. As I said proceed with caution and don't just get one quote/offer.

EDIT:  Countrypaul posted while I was typing - I agree with his comments regarding the potential legal nightmare if you come to sell in the seven years.  I think it would be better to get some quotes for the install and look at paying for it herself and using a loan or the GreenDeal  (or whatever it is called now) - not sure if that affects the level of RHI.  The RHI payment is calculated for the specific install based on the property EPC figures and the efficiency of the system - which the installer should be able to give you an idea of from their design notes. As Countrypaul has said the RHI is designed to pay for the cost of the install over 7 years - some installs will cover the cost quicker some may take longer.

Roger
« Last Edit: October 26, 2020, 09:24:02 AM by marshman » Logged

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Countrypaul
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« Reply #3 on: October 26, 2020, 02:33:40 PM »

This is the thread I was refering to earlier https://www.navitron.org.uk/forum/index.php/topic,32186.0.html
It has links to the RHI with Green Deal implications.

I would definitely follow Rogers recommendation to get multiple quotes regardless.
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