Biomass boiler demand up as RHI rate reduces in January

Commercial Biomass BoilerThe Renewable Heat Incentive tariff for non-domestic installations of small biomass boilers (<200kW) will be reduced by a minimum of 20% from 1st January 2015. This digression has been triggered by the number of installations of biomass boilers in the UK since the RHI was launched and demonstrates the sharp increase in popularity of biomass fuel as an alternative to oil or LPG.

Every quarter, the Department for Energy and Climate Change (DECC) assesses what the current number of renewable heating installations are likely to receive in RHI payments for the next 12 months and compares it to the assigned RHI budget for the coming year. Once a technology goes over its budget, DECC will announce how much the tariff will be reduced.

DECC has now released the latest monthly forecast for the RHI expenditure, and the small biomass band has hit its individual trigger so the RHI tariff will be reduced by a minimum of 20% to:

Tier 1: 6.1p/Kwh, Tier 2: 1.6p/Kwh.

However, if the total trigger (roughly the RHI budget) is hit, every technology deploying above its individual technology triggers will be degressed 5% in addition to any other degressions. It is therefore a possibility that the small biomass tariff will be reduced with 25%, as the total trigger is close to being hit. The confirmed digression figure is expected to be announced at the end of November.

At EnergyMyWay we have been advising our customers about this over the last couple of months and this has resulted in a high demand for biomass boilers from businesses as more people switch to cheaper, sustainable fuels, particularly for properties off the mains gas grid and reliant on expensive oil or LPG.

The key issue now is to plan for installations between January and end March 2015 i.e. before the next date when the tariff will be lowered. Our advice is to contact us as soon as possible if you are interested in a biomass boiler or any other renewable energy system, to secure the highest returns.

More about biomass boilers for non-domestic installations

More about the non-domestic Renewable Heat Incentive

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James Eades

By: James Eades

Operations Director, James Eades is EnergyMyWay's in-house expert on renewable energy policy, microgeneration technologies and best practice in the renewable energy industry.