What the RHI changes mean for biomass users

What the RHI changes mean for biomass users

What is the RHI?
The Renewable Heat Incentive is a government financial scheme to promote the use of renewable heat. It rewards those who use renewable energy across the UK. The current government have committed up to £1.05bn in 2021 to the RHI, demonstrating commitment to this long-term scheme to reduce carbon emissions from heating.

What are the changes?
The changes listed below came into effect on 20th September 2017. There are more changes expected to come in late 2017, or early 2018 but the dates have not been confirmed yet.

Domestic tariff changes:
The domestic tariff increased from 3.85p per kWh to 6.43p per kWh. The rates are still guaranteed for 7 years.

Additionally, annual heat demand limits have been introduced. This means that there is a limit to the financial support participants can receive for their heat annually. This is now set at 25,000 kWh per year for domestic biomass participants.

You can read more about the changes to domestic tariffs here.

Non-Domestic tariff changes:
The threshold boundaries and tariff rates for small, medium and large non-domestic biomass users have changed.

The boundary between Tier 1 and Tier 2 is raising from 15% to 35%. Large biomass installations will move from a single, untiered tariff to a tiered tariff with the same 35% threshold.  The term threshold means the maximum percentage of annual running hours.

For small, medium and large biomass installations accredited after 20th September 2017 the first 3066 hours (35% of the year) will be payable at the higher Tier 1 tariff. Any further heat used during this 12-month period will be payable at the lower tier 2 tariff.

Any boiler, regardless of output, attracts a tariff of 2.96p per kWh at tier 1, and 2.08 p per kWh at tier 2.

The rates are guaranteed for 20 years, so biomass still remains a beneficial investment for small and medium installations and an even more attractive investment for larger installations. The table below demonstrates the new tariffs and tiers, and you can find further information here.

RHi Tariff 2017Image source: https://www.ofgem.gov.uk/system/files/docs/2017/09/factsheet_september_gb_rhi_reforms.pdf

What if I’m already on the scheme?
If you already have a large biomass system with a date of accreditation between 14 December 2016 and 19 September 2017, your tariff will automatically be uplifted from the 20th of September. There is no change to the tariffs for other existing biomass systems that are already registered on the scheme.

If you have any further queries or would like to know how Billington Bioenergy can help you please get in touch on 0330 995 0270 or bioenergy@bbe.uk.com

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