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Biomass Tariff Reductions - Commercial and Domestic

Published on 07/11/2014

DECC's has released it's quarterly assessment data and it looks likely that the biomass tariffs for both domestic and commercial are likely to be reduced.

Our assessment is as follows:-

Commercial Biomass (Non Domestic) RHI
The small biomass tariff will be reduced by a minimum of 20% from 1st January 2015. DECC assesses every quarter what the current number of accreditations and installations are likely to receive in RHI payments and compares this to the assigned RHI budget for the coming year. For any technology that goes over its budget, DECC will announce how much the tariff will be reduced by.

DECC's latest release includes their monthly forecast for the RHI expenditure, the small biomass band has hit its individual trigger. The forecast spend over the next 12 months for this band is £96.3m, which is £19.6m above its individual technology trigger for 31 October 2014 (£67.2m). This means the overall 50% trigger has also been hit.

The small biomass tariff was degressed by 10% in October of this year and we expect the tariff to reduced by a minimum of a further 20% to Tier 1: 6.1p/Kwh, Tier 2: 1.6p/Kwh.

However, if the total trigger is hit, every technology above its individual technology triggers will be degressed 5% in addition to any other degressions. This means that it is a possibility that the small biomass tariff will be reduced by 25%, as the total trigger is close to being hit.

The degression will be announced at the end of November and the tariff levels are planned to come into effect on 1st January 2015.

Domestic Biomass RHI
The domestic biomass tariff is very likely be reduced by 10% from 1st January 2015. During the latest two months, the forecast of future spend in the domestic biomass market has grown from £1.84m to 4.03m (a difference of £2.19m). The biomass trigger is £4.2m. If the growth rate of £1.1m per month continued for October, the domestic biomass trigger will be hit, causing a 10% degression. It therefore seems very likely that a degression will occur.

Any degressions that are announced at the end of November will come into effect on the 1st January 2015.

Order now to maximizer your chances of getting the highest possible RHI rate.

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