The Department of Energy and Climate Change has set out a long term plan for the Renewable Heat Incentive (RHI) to ensure commercial, industrial and community organisations projects stay within its budget.
Each year there will be a fixed annual budget for the RHI with DECC planning to introduce a degression approach similar to the regime adopted for the Feed-in Tariff scheme.
This will involve tariffs available to new applicants being reduced if uptake of the technologies supported under the RHI is greater than forecast. This will be done by monitoring uptake on a quarterly basis against a series of triggers. One months notice will be given before any reductions are made to the tariffs for new applicants.
DECC also plans to consult on changes to some of the non-domestic tariffs this spring and will update soon on which tariffs will be included.
It is DECC’s intention that where tariffs increase as a result of the current review, installations accredited from 21 January 2013 would benefit from that increase once the new tariffs come into force.
Energy and 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.”