Renewable Heat Incentive for heatpumps
Following the Chancellor’s autumn statement when he reaffirmed the financial support for RHI payments, DECC have announced further reductions in the payments for new biomass installations commissioned after 31st December 2015.
The DECC section of the GOV.UK website publishes information on the RHI and other matters.
Degression of Commercial RHI for biomass
DECC has adopted a mechanism for budget management of RHI payments which involves “degression” of tariff rates for technologies that are absorbing more cash from the RHI budget than DECC had envisaged. This has led to various degressions of the RHI tariffs for biomass boilers.
• The first degression was a 5% reduction in the tariff for medium biomass from 1 July 2013.
• The second degression was a 5% reduction in the tariff for small biomass from 1 July 2014.
• The third degression was a 10% reduction in the tariff for small biomass from 1 October 2014.
• The fourth degression was a 10% reduction in the tariff for small biomass from 1 January 2015.
• The fifth degression was a 15% reduction in the tariff for small biomass from 1 April 2015.
• The sixth degression was a 25% reduction in the tariff for small biomass from 1 July 2015.
• The seventh degression is a 5% reduction in the tariff for small biomass from 1 October 2015.
• The eighth degression is a 10% reduction in the tariff for small biomass from 1 January 2016.
• Following the current pattern, a further fall in the tariff for small biomass is predicted from 1 April 2016.
DECC’s policy for degression is explained here.
The Quarterly Forecast October 2015 announced degression from 4.18p to 3.76p for the tariff for small biomass boilers, with effect from 1 January 2016.
There is no risk of degression for RHI Tariffs for GSHPs
None of the other technologies are at risk of degression as the uptake of GSHPs and solar thermal panels is only a small fraction of what DECC had anticipated.
The tariff for GSHP at 8.84p is now more than twice that for small biomass.
Summary of changes to the non-dom RHI
RHI & RH-PP Deployment Data from DECC
Degression of Domestic RHI for biomass
• The first Domestic RHI degression was a 10% reduction in the tariff for biomass from 12.2p to 10.98p from 1 January 2015.
• The second was a 20% reduction in the tariff for biomass from 10.98p to 8.93p from 1 April 2015.
• The third was a 20% reduction in the tariff for biomass from 8.93 to 7.14p from 1 July 2015.
• The fourth was a 10% reduction in the biomass tariff from 7.14 to 6.43p from 1 October 2015.
• The fifth is a 10% reduction in the biomass tariff from 6.43 to 5.14p from 1 January 2016.
• None of the other technologies are at risk of degression as the uptake of GSHPs and solar thermal panels is only a small fraction of what DECC had anticipated.
The tariff for GSHP at 19.1p is now more than three times that for biomass.
This, together with the continuing high cost of biomass pellets makes heatpumps the optimal green solution for heating homes and businesses.
