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Assignment of Rights: What's it all about?


The Assignment of Rights came into force on the 27th June 2018. It’s a new method to help households finance a renewable heating system. This will hopefully allow homeowners to benefit from a more efficient heating and hot water system. So, what is involved in the Assignment of Rights and how does it work? Hopefully, this blog will help you understand.

What is Assignment of Rights?
The Department for Business, Energy & Industrial Strategy (BEIS) is providing an option to help consumers overcome the barrier of the upfront cost of a renewable heating system, such as air source heat pumps, by introducing the Assignment of Rights which came into force on the 27th June 2018. This allows an ‘investor’ to help fund the initial cost of installing a renewable heating system and then the applicant would assign their Renewable Heat Incentive (RHI) payments to this investor. The applicant should then benefit from a reduction in heating costs and would also be the owner of the system. An applicant to the scheme can be a householder, landlord or social landlord.

How does Assignment of Rights work?
The registered investor and applicant enter into an agreement, then the heating system is purchased and installed. The applicant applies to Ofgem and as part of the application process nominates the registered investor, then if successfully accredited, the nominated registered investor receives the RHI payments for 7 years. The applicant will own the equipment from the beginning.

What’s in it for Applicants?
The key reasons why an applicant would look at having a renewable heating system installed is:

  1. applicant benefits from having a brand new system
  2. the potential running cost of the new system should be lower than their current heating system, thereby benefiting from a reduction in energy bills

It’s important that applicants make an informed choice. Just because you could have a new system installed for next to nothing doesn’t mean you should have it. It’s important to look at your motivation for having the new system. Your first step could be to look at your existing heating system and evaluate its efficiency – you can generally do this by age and also if you have an Energy Performance Certificate it could show you how fuel efficient your existing system is and the potential savings from having a new system installed. Another important factor is what’s the new system going to cost you to run compared to your existing system? This is something you need to be aware of because if you have the new system installed it could potentially cost you more money to run than previously. A new renewable heating system is a good idea but for the right applicant.

Applicants should also bear in mind that they have ‘ongoing obligations’ which are explained in more detail at https://www.ofgem.gov.uk/environmental-programmes/domestic-rhi/participants/ongoing-obligations. The ongoing obligations are the applicant’s duties and responsibilities under the RHI scheme.

A participant must comply with the ongoing obligations for the investor to receive DRHI payments and avoid enforcement action. Applicants will also need to declare annually that they are still compliant with the ongoing obligations.

What’s in it for Investors?
An investor will generally finance the purchase, installation and maintenance of renewable heating systems for households in exchange for receiving the RHI payments. Investors will generally be looking for a return on investment and may even have a figure in mind, e.g. 5-10% return on investment. This means that the investor will need to consider many different elements of a potential installation, including the cost of the equipment, the cost to install and what maintenance is required for the upkeep of the system. This all means that an investor who has undertaken due diligence should have a model whereby certain property types with certain existing heating systems will not meet their criteria. This will hopefully mean that the deployment of renewable heating systems is undertaken in a controlled manner where the applicant is satisfied, and the investor receives a return on their investment.

To take part in the Domestic Renewable Heat Incentive (DRHI) scheme, investors must demonstrate that the installation meets the following:

  1. the equipment is on the DRHI Product Eligibility List – see https://www.ofgem.gov.uk/publications-and-updates/domestic-renewable-heat-incentive-product-eligibility-list-pel.
  2. an Energy Performance Certificate (EPC), less than 24 months old at the time of installation may be needed for the property where the equipment will be installed. If significant changes have taken place to the property since the EPC was issued, you may need another EPC.
  3. a Microcertification Scheme (MCS) installation certificate number for the heating system.
  4. that the investor is a member of a Chartered Trading Standards Institute (CTSI) Approved Consumer Code, if applying under the Assignment of Rights scheme.

What’s HIES involvement in Assignment of Rights?
A potential investor under the Assignment of Rights will need to be a member of a Consumer Code and also register with Ofgem. HIES is a Chartered Trading Standards Institute (CTSI) Consumer Code and will require investors to go through an accreditation process which will involve us looking at:

  1. how they will generate leads
  2. their sales process
  3. the equipment to be used
  4. the design and installation process
  5. their aftercare customer service

We will also look at a copy of their model contract and may even require a third party to look at it from a consumer law viewpoint and provide HIES with sign off. Once approved by us, investors can make an application to Ofgem to become a ‘registered investor’. We want to ensure that applicants receive accurate information and therefore will be looking at any investors who are members of HIES to also join The Energy Performance Validation Scheme (EPVS) to have each contract independently checked.

Further information
Ofgem has released an assignment of rights guide which you can access by clicking here.

 

Have a question?
Call us on 0344 324 5242
Or send an email to communications@hiesscheme.org.uk

Is Energy Storage The Future?

 


Is Energy Storage the future?Do you know the word we dislike most in the English Language? It’s that word ‘but’. It really does get in the way of lots of things in life. Just when you think everything’s fine, along comes a ‘but’. And this, unfortunately, is the same with energy storage.

When we speak to our members, our manufacturing partners, government departments and that bloke in the pub who knows everything, they all agree on one thing – energy storage is the future, but …

  1. But the price isn’t low enough yet
  2. But they’re not yet safe enough
  3. But they’re still too big and heavy for many domestic settings
  4. But they don’t hold enough charge
  5. But their life isn’t long enough to achieve an attractive payback period

When we talk about energy storage, we shouldn’t forget about heat storage units, which are fast becoming an extremely effective addition to renewable energy production. But we don’t have the space to look at them in this article (There’s that word again: ‘but’. For such a small word it really causes a lot of trouble. At least the word ‘hangover’ has the decency to have eight letters and three syllables). Here, we’re looking at Domestic Electrical Energy Storage Systems, to give them their full title. Most people refer to them as batteries.

Battery Storage
Battery Storage comes in all shapes and sizes and is nothing new. In 1800 Volta invented the first true battery – a real coincidence that he already had an electrical sounding name. One of the UK’s most impressive batteries is actually a mountain. Situated in Llanberis (sorry for spitting) in Wales and known as 'Electric Mountain’, grid electricity is used to pump water up the mountain during the daytime when the UK has a surplus of power and it’s therefore cheap (even free). Then, during peak times, the same water is allowed to run down the mountain tunnel to create hydropower.

Domestic Batteries
We’ve been using primary batteries in our homes for decades. Primary batteries are those that we throw away (put into the appropriate recycling unit), whereas secondary batteries can be recharged. One of the problems we’ve had is how often we can recharge these batteries before they lose their efficiency. Take Apple’s recent problem with the iPhone 6 that gave up the ghost after two years. We measure battery life in ‘charge cycles’, and we are now seeing domestic batteries that, at least in a test environment, specified at 10,000 cycles within a certain depth of depletion (DOD – the percentage of the battery that can be effectively used, as most lithium batteries require an amount of charge to remain).

If some of the battery usage calculators that are in current use are to be believed, then domestic batteries are not the future – they’re already here and contributing significantly to the self-consumption of many consumers. But most calculators tend to assume a perfect environment where there are no losses in the cabling, no extremes of heat or cold, where consumers don’t go on holiday, leaving the energy largely unconsumed, where there are zero maintenance issues and the battery will never lose efficiency or need replacing. Add in all these factors and it becomes debatable as to whether the battery will pay for itself before it goes the way of those iPhone 6 batteries.

But there’s a lot of investment in batteries at the moment, meaning they will get smaller in size, larger in capacity, lighter, safer, more efficient and longer lasting. Importantly, the investment isn’t coming so that we can squeeze a few more kilowatt hours out of a domestic solar system, making up for the lack of Feed-in Tariff from next year. In fact, the next push behind domestic energy storage systems will be to the majority of consumers – not just those who have solar, wind or hydro.

Grid Interoperability
On their own, a 3, 5 or even 10-kilowatt battery will make little difference to our national energy challenge, but put thousands, or even millions of these domestic storage units together, and they become a powerful proposition. Enter ‘Aggregators’ – a company that gathers together hundreds of domestically owned batteries and buys and sells the energy that they store for their customers, keeping a small percentage for their trouble. A sophisticated technology platform tracks customers’ usage so that it can predict how much energy will be spare at peak times, then sells it to the Grid. Then, when energy is at its cheapest, the batteries charge up again – either for self-consumption or to sell back for a profit. Homes that do have renewable energy will be able to take even more advantage of this system, but it will become commonplace for most domestic households.

By using this type of technology – known as grid interoperability – consumers payback period is reduced significantly, moving them into profit far more quickly. It also helps the country’s energy imbalance, particularly as the Grid can call upon this storage in seconds – far quicker than other, less desirable sources, such as coal or nuclear.

So when can we look forward to this happening? Is this another of those inventions that we were promised and are still waiting for? Like the hoverboards from Back to the Future? On a small scale, this is already happening, and many of our partners are geared up to take this mainstream in 2018 (we’ve seen the future – and it’s not just garlic bread).

Is energy storage the future? Yes, but it’s fast becoming the present.

 

So if you want to be part of this energy revolution, we can hook you up.

Just get in touch - Call us on 0344 324 5242

  

Mis-selling in the Renewable Industry

 

Mis-selling in the renewable industryMis-selling in the renewable industry can take many forms and there are some scammers out there trying to raise alarm bells for consumers who already have renewable products installed.

In the renewable sector, consumers, on a far too frequent basis, have been, and still are, being mis-sold renewable/home energy products based on over-inflated (or sometimes just made up) energy performance calculations and estimates.

Unfortunately, it doesn’t end there!

Consumers who have already invested in renewable products such as Solar PV are being targeted by scammers purporting to offer varying degrees of maintenance opportunities including upgrades, extended warranties or additional products. Some consumers are even being mis-sold through claims that their products need to be replaced, are faulty or that they will see an increase in performance with extra maintenance.

Protecting consumers
However, HIES, a Consumer Code and Consumer Protection Scheme, will always advise consumers to use an installer who is a member of a Consumer Code and to check what protection they truly receive from their installer and Consumer Code. HIES also offer a free Consumer Helpline for consumers who wish to check the status of HIES members and get advice.

At HIES, we work with our members to ensure that consumers are protected, and we offer comprehensive protection throughout the sales, installation and after-sales cycle. In addition, HIES developed the Energy Performance Validation Scheme (EPVS).

 

EPVSEPVS certifies the energy performance calculations and estimates installers provide to consumers to ensure they are correct. EPVS then makes direct contact with consumers to verify these figures and ensure the consumer understands the performance figures/returns. For further information on how EPVS protects consumers please visit the website www.epvs.co.uk

 

Mis-selling has seriously damaged consumer confidence resulting in many consumers not trusting installers and ultimately not having the peace of mind to buy. HIES is dedicated to helping improve the renewable industry. HIES is focussed on Consumer Protection and we will continue our work with Government, Chartered Trading Standards Institute (CTSI) and other bodies to show the benefits of renewable energy and the difference it makes to people’s lives.

 

 

Have a question?
Call us on 0344 324 5242
Or send an email to communications@hiesscheme.org.uk

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