12. To make this complaint and our decision easier to understand, it would be helpful to explain more about the DRHI scheme.
Background to the DRHI scheme
13. The DRHI is a government-backed scheme designed to encourage the use of renewable heat. It aims to help householders or landlords access funding to help with the costs of a renewable heating system. People who join the scheme, and stick to its rules, receive quarterly payments for seven years for the amount of clean, green renewable heat it is estimated their system produces. The scheme is now closed to new applicants although applications following a change of ownership may still be made.
Ongoing obligations
14. To be entitled to payments under the scheme, participants must follow several rules. Ofgem issues guidance to applicants about these rules in the DRHI Reference Document. This details the scheme’s eligibility criteria, how to apply and what successful participants must do to continue to be entitled to payment. Ofgem refers to this as the participant’s ‘ongoing obligations’.
15. The guidance sets out the ongoing obligations in detail and the action Ofgem could take if it finds out the participant is not meeting their ongoing obligations.
Annual declarations
16. To help Ofgem make sure that participants are continuing to meet their ongoing obligations, participants must submit an ‘annual declaration’ by a specified date. These declarations ask the participant to confirm that they continue to meet the eligibility criteria for the scheme and are meeting their responsibilities. According to Ofgem’s general guidance, it will send the participant an email when these declarations are due (or by post if that is how the application was made).
17. Ofgem also issues specific guidance in its help sheet, ‘How to complete and submit your annual declarations’, which explains the questions and why they ask them. The guide makes clear that Ofgem views completing the annual declarations to be an ongoing obligation that the participant must comply with to continue to receive their payments. Ofgem warns that if the participant does not submit their declarations on time, this could affect their payments.
18. Ofgem told us the information required in the annual declaration is essential to making sure that the participant is meeting their ongoing obligations. It explained that the declaration is usually the only point of contact between Ofgem and the participant. Non-compliance is a serious concern for Ofgem as it is the only way it receives confirmation directly from participants in relation to their compliance with the scheme. Ofgem told us it is responsible for managing public money and relies on the information in the annual declaration to make sure participants remain entitled to receive payments under the scheme.
The regulations
19. The scheme is operated under a law called the DRHI Scheme Regulations 2014 (the Regulations). Part 10 of the Regulations outlines Ofgem’s powers and responsibilities when dealing with a failure to comply with the terms of the scheme.
20. Regulation 58 deals with Ofgem’s power to withhold payment in the case of non-compliance. This makes clear that Ofgem can stop payment if it is satisfied the participant is failing to meet an ongoing obligation
21. Regulation 59 gives Ofgem the power to cancel accreditation from the scheme
• where there is or has been a serious or repeated failure by a participant to comply with an ongoing obligation • where there has been a failure to comply with a notice under regulation 58(2); • where an accredited domestic plant has been given accreditation wholly or partly as a result of the provision of information which was incorrect in a material.
22. Regulation 62 says if the participant is unhappy with Ofgem’s decision to suspend payment and/or revoke accreditation, they may request a formal review of that decision. According to the Regulations, they must make that request ‘within 28 days of the date of receipt of notification of the decision being reviewed’.
Ofgem’s decision to revoke accreditation
23. Under our Principles we expect organisations to be clear about what customers can and cannot require from them. We also expect organisations to make sure customers are clear about their own responsibilities.
24. The evidence we have seen shows that Ofgem gives detailed information to all customers (including Mrs J) about what they must do to continue to be eligible to receive payment under the DRHI scheme. This includes making clear that customers must submit the declarations annually with the correct information (that is, an accredited BSL provider). Unfortunately, Mrs J did not comply with that responsibility and that is why Ofgem withdrew her accreditation. In the circumstances, we cannot say the decision was unfair.
25. Under our Principles we expect organisations, when making decisions, to make sure their measures are balanced with what they want to achieve. We also expect organisations to spend public money with care and to assess risk as part of making decisions. In this case, Ofgem has clearly explained why it considers the declarations to be so important when it comes to protecting public money. We are satisfied Ofgem has acted in line with our expectations.
26. Mrs J told us her mental health is suffering at the possibility of more debt because she will need to take out a bank loan at a time when the cost of living is rising.
27. We have extreme empathy with the situation Mrs J sadly finds herself in and do not doubt the financial pressure she now faces. We can only look at whether Ofgem acted in line with its administrative responsibilities.
28. Ultimately, it is the participant’s responsibility to follow the rules. Although a check of the annual declaration may have picked the discrepancy up earlier, it does not change the fact that they were not eligible (so not entitled to the payment). Ofgem has a responsibility to recover the overpayment.
29. In summary, we have decided not to uphold this complaint. This is because we can see nothing to suggest Ofgem failed to act in line with our expectations. We realise this is unlikely to be the outcome Mrs J was looking for from her complaint. This has been a difficult time for her, and we have no doubt these events have affected her financially and emotionally. We hope we have explained why we have come to our decision and thank Mrs J for bringing her concerns to our attention.