Answer: A nominated investor be approved by Ofgem to register for the Assignment of Rights. Firstly, they must register with a Consumer Protection Code such as RECC or HIES. Secondly, a potential investor will submit an application to Ofgem. Finally, the homeowner will nominate the investor to receive payments on their behalf as part of the Domestic RHI application process.
If you want to know more details about registering as an investor for the Assignment of Rights for Domestic RHI, please continue reading this article. If you are a homeowner and want to know more about how this can benefit you, read this article.
The Assignment of Rights (AoR) for the Domestic RHI scheme is designed to help homeowners and landlords get financial assistance to install heat pumps, biomass boilers, and other renewable heating solutions in the UK. A nominated investor can pay for the purchase and installation (and maintenance) of a renewable heating system, and receive the homeowner’s RHI payments as payback on the loan.
This is an important step to remove one of the biggest barriers to renewable heating uptake: the initial capital outlay. It is an excellent opportunity for investors to earn a return, whilst assisting UK homeowners to move forward into a sustainable future.
Important: It is recommended by Ofgem to seek legal advice before setting up as an investor for Assignment of Rights. Here is their guidance on the matter of status:
“Ofgem and the Department for Business, Energy & Industrial Strategy (BEIS) are currently considering how the scheme may be impacted by other legislation or regulatory requirements. We will issue further guidance in light of this. In particular, potential investors should consider whether, depending upon their contractual arrangements, they may be engaged in regulated lending or credit broking.”
When you are satisfied with your legal standing, it is time to proceed with registration. Firstly, all registered investors must comply to a Consumer Protection Code. Nominated investors for the Assignment of Rights are registered with one of the following CPCs:
Investors must create and provide a “model” contract, which reflects the one they wish to use for agreements with homeowners. This contract must comply with the relevant consumer codes.
Next, potential investors need to apply to Ofgem with all the relevant credentials. Finally, the homeowners need to nominate the approved investor as part of their Domestic RHI application.
Here is the different application stages in a simple priority list:
The creation of a model contract is essential for the process of registering as an investor for Assignment of Rights. It is strongly recommended that you seek legal advice when creating this contract, to ensure that all aspects are covered. Below, we have listed some of the primary considerations. Please remember that these aren’t exhaustive, and there may be many more aspects to insert into a model contract.
Purchase and installation: Who is liable for the installation, and potential errors that occur along the way? Which party needs to cater for planning rules, and who is liable for additional costs associated with installation of a renewable heating system?
Ongoing maintenance: What is the liability for ongoing maintenance, and who pays for fixing breakdowns? Renewable heating systems are reliable, but sometimes things go wrong. Who covers the cost of the annual service?
Financial details: Does the financial package cover the entire cost of purchase and installation, or just a proportion of the overall outlay? Is the fuel supply covered in the amount?
Communication routes: Who will communicate and how will you communicate to all key stakeholders?
Ending the contract: Are you covered in case a new homeowner comes in and doesn’t want the agreement and/or doesn’t want the renewable system? What will you do if the homeowner wishes to swap to another nominated investor?
As you can see, some of these issues could become complex. It’s always a good idea to seek professional legal advice when starting out as an investor for the Assignment of Rights.
Of course, payment amounts are the same as they would be if sent to the homeowner themselves. These are estimated based on the system’s yearly heat demand. The current tariffs are displayed on the Ofgem website, available to view here.
As a joint agreement, you have a responsibility to inform the relevant authorities if conditions change.
Nominated investors for the AoR must inform Ofgem if the equipment breaks down, and they must inform them if the homeowner sells their property. If there are significant updates or changes to the system itself, Ofgem must be alerted. More broadly, if there are any circumstances which change eligibility, Ofgem must be informed in full detail.
Finally, if there is a change of contractual agreement or the version of model agreement supplied is no longer the latest, the investor must update and inform Ofgem.
We are experts in renewable heating, and we can help homeowners install the most suitable technology for their home. The Assignment of Rights will boost the number of heat pumps, biomass boilers, and solar thermal panels being installed in the UK, and Smart Renewable Heat is here to meet the demand.
With over twenty years in business and over 1,000 heat pump installation projects completed, we are the perfect partner for residential and commercial projects across the UK. For more information about our services, contact us today.
Please contact us using the form below, or call us on 0800 865 4328.