The Department for Energy & Climate Change has announced that the RHI tariff for small commercial biomass is is to be degressed from 1 January 2015 by 10% rather than the anticipated 20%.

Monthly forecast expenditure figures published by DECC for the end of October had indicated a super trigger for the small biomass band which would have resulted in a technology degression of 20%.

However, changes to the forecast have resulted in a degression of only 5%. This, together with an additional 5% degression resulting from the whole RHI expenditure trigger being hit, yields the new reduction total of 10%, which will be applied from the beginning of 2015.

From 1 January 2015, the tariff for Tier 1 small commercial biomass of less than 200kW capacity will be 6.8p (previously 7.6p), with Tier 2 at 1.8p (previously 2.0p).

ZERO managing director Finian Parrick, said: “This announcement is a real bonus for the small biomass sector which was anticipating a less favourable scenario.

“It means that potential returns - at approximately 15% - will remain attractive to customers. This presents an excellent opportunity to impress on customers who may be prevaricating that now is a good time to confirm installation, as the 10% degression may theoretically increase in the future.”

The new tariff figures apply for installations with an accreditation date on or after 1 January 2015. To receive the previous tariff, installations must meet eligibility criteria and the application made before 1 January.

The UK non-domestic renewables market between April 2013 and March 2014 showed buoyancy with an increase of more than 50 % approved installations than in the first 18 months of the scheme, with 2561 accredited installations. Of these, 93.1% were solid biomass boilers.