The Department of Energy and Climate Change (DECC) has set out new proposals for managing the budget of the non-domestic Renewable Heat Incentive (RHI).
Under DECC’s proposals, a new flexible degression system will be introduced to reduce the tariff rate for new applicants should uptake reach pre-determined trigger points.
Tests to see whether degression is needed would take place quarterly, and if a tariff reduction is needed, one month’s notice would be given. Progress towards the trigger points for each technology and the scheme overall would be monitored throughout the year and data published monthly.
Climate change minister, Greg Barker, said: “The Coalition is fully committed to driving forward investment in renewable heat, and our proposals will make sure we provide the right support for the industry.
“We want to continue helping renewable heat to grow and flourish, providing long term certainty for those who choose to invest in it.”
The Renewable Energy Association (REA) has welcomed the news. Head of policy, Paul Thompson, said: “We welcome the fact that DECC has listened to industry and has made a number of sensible proposals to improve the operation of the scheme.
“There are clearly many details still to resolve on the cost control mechanism, and we are disappointed to see no firm proposals on tariff guarantees to protect project developers from the risk of tariff reductions. We look forward to working closely with our members and government to make the case for this over the coming months.”