DECC proposes increased RHI tariffs

The Department of Energy and Climate Change (DECC) is aiming to boost the use of renewable heat in non domestic applications by increasing a number of Renewable Heat Incentive tariffs.

Under DECC’s proposals, support for ground source heat pumps, large biomass and solar thermal will be increased.

The rates published in the consultation can be seen below:

The energy and climate change minister Greg Barker noted that over 1,300 installations have already been installed under the non domestic RHI but more could be done. He said: “The Renewable Heat Incentive has been running for nearly eighteen months, so now is a timely moment to look again at the tariffs.

“We need to make sure they are set at the right level to continue bringing forward investment and growth and at the same time keep costs to the taxpayer to a minimum. That’s what our proposals set out today are designed to do.”

After reviewing the evidence base, DECC has taken the decision not to increase the tariff for small and medium biomass due to the ‘current high level of demand for these technologies’. In addition, DECC will be reducing support for medium-scale commercial biomass installations by 5%. The new rates can be seen below and will come into effect on 1 July 2013:

The higher rates for technologies such as solar thermal were made possible after the government reevaluated how it calculated the value of offshore wind – the stated marginal technology. By including other calculations, such as the value of the Carbon Price Floor, DECC has raised the cap allowing the tariffs to be boosted.

Commenting on the revised cap, Stuart Elmes, chair of the Solar Trade Association’s (STA) Solar Thermal Working Group noted that it could have other implications. He said: “The realisation of the full cost of government support for offshore wind also impacts on the domestic RHI. It should enable DECC to implement a higher tariff for domestic solar thermal when the RHI launches next spring than had been proposed in last autumn’s consultation.”

Industry has broadly welcomed the revised RHI tariffs, with the STA welcoming the government’s 'commitment to support the growth of renewable heat in the UK'. Dave Sowden, chief executive of the Micropower Council, added: “The proposals for increased levels for biomass, GSHP and solar thermal are good news for industry. With deployment levels in the non-domestic Renewable Heat Incentive so far having been unsatisfactory, we have been awaiting this tariff review consultation announcement for some time.

“The introduction of the new tariff levels would help provide the boost needed to increase deployment, not only providing support to industry but also helping the UK on its pathway to renewables.”

However, Sowden warned: “This is the consultation stage and we are some way from the tariffs being introduced but this provides a good demonstration of the government’s commitment to support the UK renewable heat industry.”

The consultation will close on 28 June 2013 and can be viewed here.