Forecasted RHI degression

Added: August 01 2017

It didn't feel too long ago we were keeping you informed on the latest Renewable Heat Incentive (RHI) tariffs, degression news and updating all our RHI calculators with the new tariffs and yet, here we are again. Before you panic, this is merely a forecast from the Wood Heat Association (WHA) on the next quarter's biomass degression rates and not an update on new RHI tariffs, you'll be pleased to know.

The medium non-domestic biomass expenditure has risen to £165.2m. This is an increase of 434% compared to the last quarterly assessment. As the tariff was degressed by 10% last quarter (5% from the individual trigger and 5% from the total trigger), this means that the medium biomass tariff will be degressed by 5% if it grows less than 50%, 10% if it grows between 50%-150%, and degressed by 15% if it grows by more than 150%. The WHA forecasts that the degression that will hit the biomass sector on October 1, 2017 will more likely be by 15%.

The small non-domestic biomass expenditure has risen to £151.8m, which is an increase of 18% compared to the last quarterly assessment. As the tariff was degressed by 5% last quarter (5% from the total trigger), the small biomass tariff will be degressed by 5% if expenditure stays below £162.5m, and degressed by 10% if expenditure rises above £162.5m. According to the WHA, it seems very likely that it will be degressed by 5% on October 1, 2017.

The domestic biomass expenditure has risen to £39.54m, which is £0.46m higher than last quarter. To trigger a degression, the expenditure has to increase by £3.6m, which is unlikely at present, and a degression is therefore unlikely for the domestic biomass tariff and any other domestic tariffs on October 1, 2017.