Heat in Buildings Strategy - achieving net zero emissions in Scotland's buildings

Annex C Summary of GB Wide Funding for Heat and Energy Efficiency

Domestic Renewable Heat Incentive (RHI)

The GB wide Domestic Renewable Heat Incentive (Domestic RHI) is a UK Government financial incentive to promote the use of renewable heat.

Successful applicants to the scheme receive quarterly payments for seven years for the amount of clean, green renewable heat their system is estimated to produce.

The scheme opened in April 2014, and will run until 31 March 2022, having been extended by a year with only minor changes to the scheme. These include allowing those who commissioned their plant on or after 1 March 2019 to apply for accreditation up until the closure of the scheme, rather than within 12 months of the commissioning date.

Currently 19% of installations accredited under the Domestic RHI are located in Scotland.

Non-Domestic Renewable Heat Incentive (NDRHI)

The GB wide Non-Domestic Renewable Heat Incentive (RHI) is a UK government environmental programme that provides financial incentives to increase the uptake of renewable heat by businesses, the public sector and non-profit organisations.

Eligible installations receive quarterly payments over 20 years based on the amount of heat generated. The scheme closed to new applications on 31 March 2021.

While some changes were made prior to the closure of the scheme with regards to tariff guarantees and with some commissioning deadlines extended beyond the closure, no payments will be made beyond 31 March 2041. Applicants who commission now that the scheme has closed will receive a shorter payment lifetime.

As with the Domestic scheme, 19% of installations accredited under the Non-Domestic RHI are located in Scotland, more than its pro-rata share.

Green Gas Support Scheme

The UK Government Green Gas Support Scheme will run for four years from autumn 2021. The scheme will support biomethane injection in to the gas grid and is expected to contribute 21.6MtCO₂e of carbon savings over its lifetime. The scheme is to be funded via a Green Gas Levy.

Energy Company Obligation (ECO)

The Energy Company Obligation (ECO) is a UK Government programme to deliver energy efficiency measures across Great Britain (GB). The legislation obliges eligible energy providers to deliver energy efficiency improvements to help fuel poor households to reduce the cost of heating their homes (HHCRO or the Help to Heat Cost Reduction Obligation). ECO is funded through a charge on the energy bills of all customers of regulated energy companies with over 250,000 customers.

As of December 2020, BEIS report that 287,996 households in Scotland have received ECO finance (13.4% of total ECO measures in GB); an average of 118 measures per 1000 households (compared to 81 in Wales and 77 in England). The council with the highest reported number of ECO measures per household (number of measures per 1000 households) in GB is Comhairle nan Eilean Siar (Western Isles council).

Warm Home Discount (WHD)

Warm Home Discount is a GB wide scheme that provides an annual one-off discount on electricity bills paid by energy companies between September and March. Currently the Warm Home Discount is worth £140 and the costs of the discount are applied to all household bills.

In 2017-18 Scottish households represented around 10.9% of WHD recipients compared with 9.2% of all households in Great Britain. Two groups are eligible: a ‘core’ group where the household receives the Guarantee Credit element of Pension Credit (income under £167.25 for a single pensioner or £255.25 for a couple); and a ‘broader’ group on a low income as set by suppliers - some households receiving income related benefits must be included on a ‘first come, first serve basis’.

9.6% of all rebates were to the overall ‘core’ group in Scotland (117,020 Scottish households) and 12.5% to the ‘broader’ group (121,425 Scottish households).