The statutory instrument that came into force in February 2022 closed the Domestic Renewable Heat Incentive (DRHI) to new applications and to new Metering and Monitoring Service Package (MMSP) applications from midnight on 31 March 20221. The government had already set out that intention in its consultation response, which outlined the decision to close the scheme to new applications and new MMSP applications on that date1. The DRHI closed to new applicants on 31 March 20221.
The scheme was introduced in England, Scotland and Wales in April 2014 by the Department for Energy and Climate Change (DECC)1. Households meeting the eligibility criteria that had installed air source heat pumps, ground source heat pumps, biomass boilers or solar thermal heating systems could apply to receive quarterly payments over seven years for the estimated low-carbon heat their systems were expected to produce1. Participants had to own or occupy the property, or be a private or social landlord owning the heating system; newly built properties were not normally eligible unless they met certain requirements1. The scheme is set out in legislation under The Domestic Renewable Heat Incentive Scheme Regulations 2014 and subsequent amendments1.
The February 2022 instrument also amended requirements covering replacement products, annual declarations, occupancy, metering and biomass fuel quality1. Earlier reforms had been implemented in two stages, in September 2017 and May 20181. The 2017 amendment included tariff uplifts for three of the four technology types and introduced heat demand limits capping the financial support an individual installation could receive1. The 2018 amendment added metering for performance requirements for heat pumps, new MMSP payment schedules and enforcement powers, the introduction of Assignment of Rights, revised degression thresholds, and extended the budget management mechanism to the end of Scheme Year 81. Assignment of Rights applications were eligible from 27 June 20181. Government also announced the DRHI would be extended for an additional year until 31 March 2022, and removed the rule requiring applicants to submit within 12 months of first commissioning1.
Ofgem, which administers the scheme through the Gas and Electricity Markets Authority, reports that from inception in April 2014 to 31 March 2025, 117,424 installations took place under the scheme1. A total of 78,553 fossil fuel boilers were replaced by lower carbon alternatives, and estimated heat generation in domestic properties since 2014 was 10.1 TWh1. Air source heat pumps accounted for 67.4% of accreditations, 75.1% of installations were in England, and Registered Social Landlords accounted for 20.3% of accreditations1.
"The new statutory instrument which came into force in February 2022 closed the scheme to new applications and Metering and Monitoring Service Package (MMSP) applications from midnight on 31 March 2022"
Why it matters for households
For a household that did not apply before the deadline, the Domestic Renewable Heat Incentive is no longer a route to ongoing payments for a heat pump, biomass boiler or solar thermal system. The scheme remains open for existing participants, who continue to receive support until the last participant completes their seven-year support period in March 20291. The closure sits among other closed and abandoned home energy policies, and the replacement support route named in the report is the Boiler Upgrade Scheme, introduced on 23 May 2022 to support heat pumps and, in limited circumstances, biomass boilers in homes and small non-domestic buildings in England and Wales1. That scheme offers upfront grants rather than quarterly payments1. The DRHI scheme regulations were assimilated into domestic law by the Retained EU Law (Revocation and Reform) Act 2023, which received Royal Assent on 29 June 20231.
What happens next
Existing DRHI participants remain in the scheme until their support period ends, with the last completing in March 20291. Ofgem continues to process amendment applications, answer participant enquiries, issue payments for eligible heat generation and carry out monitoring and compliance work1. In Scheme Year 11 it prevented £578,530 of public funds from being paid out incorrectly and identified a further £591,609 for recovery through its debt recovery process1.
Sources1 cited
- DRHI Annual Report Scheme Year 11, ofgem.gov.uk