Thursday, 26 June 2014

Non-domestic RHI - small biomass tariff reduced

Ofgem has announced that the small biomass tariff will be reduced by 5% from July 1st 2014.

This is in response to increasing uptake in the sub 200 kW category as well as higher than anticipated levels of eligible heat being submitted in meter readings.

This degression of the small biomass category follows the annual inflation increase that took place on April 1st.  This saw the tariff increase from 8.6 p/kWh (Tier 1) and 2.2 p/kWh (Tier 2) to 8.8 and 2.3 p/kWh, respectively.

The 5% reduction from July 1st will mean that the tariff falls again to 8.4 and 2.2 p/kWh (which is similar to the levels seen in 2012).

The latest uptake figures clearly indicate that whilst the RHI overall is operating within it budgets, uptake of the small biomass category has accelerated.

Meanwhile, uptake of the medium tariff remains strong but is currently operating below budget forecasts.

Activity in the large biomass tariff category is far lower than the other categories.  However, there are clearly a number of schemes at pre-application stage (green column) and these may start to have greater impact on budgets over the next 24 months.

Overall biomass heating remains the clear 'winner' in the non-domestic RHI.  The majority of the available budget (and installed capacity) is currently allocated to biomass technologies and activity in the other RHI-eligible technologies remains relatively modest. 

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