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DECC proposes new commercial RHI tariffs

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The government has today announced the launch of a consultation on proposed changes to the non-domestic RHI.

Having already operated for 18 months, climate change minister Greg Barker said it was now time to re-assess tariff levels.

Under the government’s proposals, tariffs would double for large biomass installations from 1p/kWh – 2p/kWh. Support for ground source heat pumps would increase from  3.5-4.8p/kWh to 7.2-8.2p/kWh and tariffs for solar thermal would rise from 9.2p/Kwh to 10.0-11.3p/Kwh.

Barker added that tariffs would not increase for small and medium-sized biomass installation due to the high level of demand for these technologies.

He said: “Over 1,300 innovative renewable heat technologies have already been installed under this scheme and are generating cash for the heat they produce.

“The Renewable Heat Incentive has been running for nearly eighteen months, so now is a timely moment to look again at the tariffs. 

“We need to make sure they are set at the right level to continue bringing forward investment and growth and at the same time keep costs to the taxpayer to a minimum. That’s what our proposals set out today are designed to do.”

A consultation will now commence until 28 June. If approved, new tariffs would come into force during 2014/15. The consultation documents can be accessed by clicking here.

DECC has also confirmed that tariffs for medium biomass will decrease by five per cent under the new degression mechanism set out in February.

TechnologyCurrent tariff (p/kWh) Reviewed tariff (proposed for 2014/15)
Small biomass <200kWTier 1: 8.6
Tier 2: 2.2
No change
Medium biomass 200kW-1MWTier 1: 5.3
Tier: 2.2
No change
Large biomass 1MW + 1.02.0
Small GSHPs <100kW4.87.2 – 8.2
Large GSHPs 100kW +3.57.2 – 8.2
Solar thermal <200kW9.210 – 11.3