Office of Gas and Electricity Markets (Ofgem)

3. Mrs X complains that, following a site audit, Ofgem revoked her DRHI accreditation on the grounds that the air source heat pump (ASHP) which she had funded, and for which she was claiming, had been installed at her daughter’s property.

4. Mrs X says that she has been made to feel as though she has acted fraudulently. She states that, if Ofgem’s decision is not overturned, both her and her family will receive no financial help for having tried to contribute to environment sustainability.

5. By bringing her complaint to us, Mrs X is seeking the reinstatement of the accreditation and for any withheld payments to be made to her daughter, who owns the property.

26. To put this case and our decision in context, it may be helpful to provide some background to the DRHI scheme.

27. The Domestic Renewable Heat Incentive (DRHI) is a government financial incentive to promote the use of renewable heat. The scheme, which closed to new entrants in March 2022, was open to all households on and off the gas grid, who installed a renewable heating system and met the eligibility criteria. People who joined and followed the scheme rules receive quarterly payments over seven years for clean, green, renewable heat their systems are estimated to produce.

Ongoing obligations

28. Before applying to the DRHI scheme (and until it’s closure on 31 March 2022) Ofgem strongly recommended that prospective applicants thoroughly read the DRHI Essential Guide.

29. This guide provides comprehensive information on eligibility criteria, pre-application requirements, the application process, and the ongoing obligations that participants must fulfil, once their heating system is accredited.

The Regulations

30. The Domestic Renewable Heat Incentive Scheme Regulations 2014 as amended, (The Regulations) set out the eligibility criteria and conditions for accreditation, the ongoing obligations and compliance requirements for participants, and the basis on which payments are made and enforced under the scheme.

Regulation 13 Plants where heat generation must be metered

31. (1) The heat generated by the plant (“plant A”) must be metered if— (a)plant A is not a solar thermal plant; and (b)plant A falls within paragraph (2), (3), (4) or (5).

(4) Plant A falls within this paragraph where the property to which it provides heat was occupied for less than 183 days in the 12 month period ending on its RHI date.

Regulation 17(1) Accreditation applications

32. An owner of a plant which meets the eligibility criteria may apply to the Authority for that plant to be given accreditation if that person owns or occupies the property to which the plant provides heat.

Regulation 59(2) Revocation of accreditation

33. Where paragraph (1) applies the Authority may— (a)revoke the accreditation for the relevant accredited domestic plant; or (b)revoke the accreditation for any other accredited domestic plants owned by that participant.

Regulation 60(1) and (2) Overpayment notices and offsetting

34. The Authority may take one of the steps set out in paragraph (2) where the Authority is satisfied that a participant or former participant has received RHI payments (“overpayments”) which—

(a)exceed the amount to which that person was entitled under these Regulations; (b)were paid whilst there was a failure by that person to comply with an ongoing obligation or following such a failure; or (c)were paid for an accredited domestic plant which was given accreditation wholly or partly as a result of the provision of information which was incorrect in a material particular.

(2) The steps set out in this paragraph are— (a)requiring a participant or former participant who has received overpayments to repay a specified sum in relation to some or all of those overpayments; or (b)offsetting a specified sum in relation to some or all of those overpayments against future RHI payments.

Regulation 62(1) and (2) Right of review

35. Any prospective, current or former participant aggrieved by a decision by the Authority in the exercise of its functions under these Regulations (other than a decision made in accordance with this regulation) may have that decision reviewed by the Authority.

(2) An application for review must be made by notice in such format as the Authority may require and must— (a)be received by the Authority within 28 days of the date of receipt of notification of the decision being reviewed; (b) specify the decision which that person wishes to be reviewed; and (c) specify the grounds on which the application is made.

Audits

Desk Audits

36. A desk audit is a remote review, using documentary evidence supplied by the participant. Desk audits typically involve Ofgem contacting participants to request specific information that would allow Ofgem to verify eligibility, ongoing compliance and the accuracy of previous submissions. The purpose of the desk audit is to confirm that the accredited system is installed, working as declared and meets all scheme requirements.

37. The requested information could include documents such as photographs of the heating system, copies of MCS certificates, invoices or commissioning paperwork, heat pump specifications, evidence of ownership or occupancy, and up-to-date meter readings if relevant to the installation.

Site Audits

38. A site audit is an inspection that is carried out in person by an auditor, at the property. Site audits are a standard part of Ofgem's compliance monitoring and help to protect the integrity of the scheme and public funding. The auditor will check that the system installed is the same one that was accredited, that it is in working order, and that it has not been altered in a way that affects eligibility.

39. During a site audit at the property, the auditor may review a participant’s supporting documents. This can include commissioning sheets, using manuals, service records, and evidence of occupancy.

40. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the organisation has got something wrong. We do this by comparing what should have happened with what did happen.

41. It is important to note that, before applying to the DRHI scheme (and until it’s closure on 31 March 2022) Ofgem strongly recommended that prospective applicants thoroughly read the DRHI Essential Guide.

42. This guide provides comprehensive information on eligibility criteria, pre-application requirements, the application process, and the ongoing obligations that participants must fulfil, once their heating system (biomass plant) is accredited.

43. The Domestic Renewable Heat Incentive Scheme Regulations 2014 (The Regulations 2014 as amended) sets out the conditions for accreditation, ongoing participation, and compliance requirements.

44. Following a desk audit, Ofgem determined that the property (property B) had been occupied for less than 183 days in year one. As a result, Mrs X had been overpaid £655.89 in ‘deemed payments’. Ofgem stated that this amount would be offset against future payments, if a meter was installed at the property.

45. Under Regulation 13 of the Regulations 2014, a meter was required to be installed, to measure the heat generation of the ASHP, in order to remain compliant with the scheme’s requirements.

46. Mrs X was notified that if a meter was not installed, the total amount repayable would be £2,541.98.

47. A site audit was subsequently conducted in February 2023, which confirmed that Mrs X was not the owner of property B. The title deed showed that the property was owned by her daughter.

48. Ofgem confirmed in its site audit findings letter dated March 2023 ‘As you do not own or occupy the property (property B) you do not meet the requirements listed in regulation 17. Occupation of a property on the Domestic RHI means occupying it as your primary dwelling. In this case, as you spend the night in [property A] you do not occupy [property B], even though you have stated that you are there during the day’.

49. As a result, Mrs X’s accreditation under the Domestic Renewable Heat Incentive (DRHI) scheme was revoked under Regulation 59(2) of The Regulations 2014 (as amended). This regulation gives Ofgem the power to revoke a participants’ accreditation when it is satisfied that the original approval was based fully or partly, on information that was materially incorrect.

50. Under Regulation 17, to be eligible for accreditation and receive payments, an applicant must own and/or occupy the property.

51. As Mrs X neither owned nor lived at property B, she was never eligible for accreditation and could not lawfully receive payments, as she did not meet the eligibility requirements under Regulation 17.

52. We acknowledge that Mrs X paid for the ASHP and installation to help her daughter financially, and that she was disappointed that Ofgem ‘were not flexible’ when she asked to transfer the paperwork into her daughter's name, so that her daughter could receive the RHI payments.

53. Whilst we empathise with Mrs X’s situation and understand that she is seeking for the accreditation and payments to be transferred to her daughter, this is not an outcome that can be achieved.

54. Accreditation under the DRHI scheme must be claimed by an eligible applicant at the outset, and is granted on the basis of that individual’s circumstances, at the time of application. The scheme does not permit flexibility to change or transfer an accreditation to another person, as eligibility must be assessed at the point the application is first made.

55. As an application for the installation had already been submitted and determined, it was not possible for a new claim be made in another person’s name, nor could the existing accreditation be passed to her daughter.

56. Under our Principles of Good Administration – being open and accountable, we expect organisations to be open and truthful when accounting for their decisions. They should state their criteria for their decision making and give reasons for their decisions.

57. The evidence indicates that Ofgem clearly explained that the revocation of Mrs X’s accreditation arose from her not meeting the eligibility criteria to apply for accreditation, or receive payments.

58. Ofgem’s DRHI Essential Guide – failure to comply with ongoing obligations says, It’s important that participant’s meet the ongoing obligations, for as long as they are a participant on the scheme. Ofgem adds that if non-compliance is confirmed, it may;

•Revoke the installation’s accreditation •Recover overpayments.

59. Given the ‘non-compliance’ identified during the site audit, and in line with its guidance, Ofgem revoked Mrs X’s accreditation and sought to recover the overpayment.

60. This action aligns with both Ofgem’s responsibilities and our Principles of Good Administration - getting it right, under which we expect organisations to manage public money with care and propriety.

61. We recognise that this has been a very difficult time for Mrs X and sympathise with the impact this situation has had.

62. In summary, we have decided to take no further action on this complaint. This is because Ofgem acted in accordance with its own guidance and regulations, when reaching its decision to revoke Mrs X’s accreditation and recover the overpayment.

63. We thank Mrs X for bringing her concerns to our attention, and wish her well for the future.

1. We have carefully considered Mrs X’s complaint about Ofgem. We are sorry to hear how much distress the whole situation has caused Mrs X.

2. Having looked carefully at the evidence, we have not identified any failings in the circumstances which led to Mrs X approaching us. For that reason, although we recognise how difficult the situation has been for Mrs X, we have decided to take no further action on this complaint. We will explain the reasons below in more detail.