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Biomass RHI will drop to 5.14p/kWh on 1 Jan 2016

Posted by Gabby Mallett on 18 December 2015 at 10:30 am

The Renewable Heat Payment for Biomass boilers and stoves is due to reduce by 20% on 1st January 2016. This is inline with OFGEM expectations.

The RHI is funded by general taxation and therefore the scheme budget is set at each Government Spending Review.  The expenditure is controlled via a ‘degression’.  This is a process where OFGEM assesses the number of installations completed in the previous quarter and recalculates the remaining budget.  When certain numbers of installs have been completed a degression can be triggered of 10% or a super degression of 20%.  Those people who apply after the notice period ends will receive the new (reduced) tariff, but those people who have already been accredited on to the scheme or have made a valid application will continue to receive the previous (higher) tariff.

As of 31 October 2015, forecast expenditure for biomass is £34.6m. This is in excess of the expenditure threshold for biomass for the quarter ending 31 October 2015 (£15.5m). It also exceeds the super expenditure trigger for the quarter ending 31 October 2015 (£31.1m). This forecast expenditure represents the amount OFGEM anticipates paying between 31st October 2015 and 30th October 2016.  In line with scheme rules as the biomass tariff was reduced 10% last quarter, and the super expenditure trigger remains exceeded, the biomass tariff will be subject to a 20% degression from 1st January.

There has been steady growth across all other technologies over the last quarter; however they are all below their triggers for the quarter ending 31 October 2015.  Therefore the tariff for Ground and Air Source Heat Pumps and for Solar Thermal will be remain unchanged.

The new tariff for installations of biomass stoves and boilers  which are accredited on or after 1 January 2016  will be 5.14p/kWh

But, watch out. Given that this was a super degression it is still possible that we will hit another 10 or 20% reduction at the next review, so if you want to get biomass installed at this higher rate, you’d better get your skates on.

Photo: SuperHomes

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