DECC confirms degression plan for RHI

The Department of Energy and Climate Change (DECC) has today confirmed its long term plans for the non-domestic RHI.

Planned alterations to the scheme, which DECC says are designed to control costs, include a fixed annual budget and an automatic degression regime which will see tariffs drop with deployment in a similar way to the Feed-in Tariff.

Under the new regime, degression trigger points will be set at 150 per cent of DECC’s expected levels of uptake for most technologies. In practical terms, if uptake exceeds forecasts by 50 per cent, it will trigger a 5 per cent reduction in the tariff rate available to new applicants.

Uptake will be monitored on a quarterly basis with DECC publishing a monthly update on progress. Furthermore, a consultation will open this spring on changes to some of the tariffs and scheduled reviews, currently proposed for 2014 and 2017.

Other changes include the introduction of biomass sustainability criteria, air quality requirements and a simplification of current arrangements for metering.

DECC is expected to confirm policy details of the domestic RHI next month.

Climate change minister, Greg Barker, said: “I am fully committed to ensuring our Renewable Heat Incentive helps as many organisations as possible get on board with a range of exciting sources of renewable heat, and at the same time stays within its means.  That’s why we are introducing a new, flexible way to control spending, alongside some further improvements to the scheme. 

“This is however just the first step on our journey to safeguard longevity, provide certainty to industry and sustain growth under this scheme.

“We are also continuing to explore whether the tariffs we offer are set at the best levels to encourage further uptake, looking at how we can open up the scheme to new technologies, and considering the right approach to encourage householders to invest in renewable heat. 

“We are continuing to work with industry and others on our plans and will be making announcements about our proposals for support as soon as possible.”

The government’s response to its non-domestic RHI consultation can be read in full here.