RHI to be cut on 30 June for sub-200kW biomass boilers but can we expect another cut in October?



The Renewable Heating Incentive (RHI) is due to be cut by 5% on the 30 June 2014, which will only appear to be a slight drop after the inflation increase that occurred in April. However, the big question is will there be another cut in October?


Like the FITs, the RHI was set up reduce automatically if a certain number of installations of one type are registered in an attempt to “cool the market”.  The RHI is a more complicated system than the FITs as it is not just divided up into bands relating to system size but also technology type, making a lot more trigger points.  Biomass has been the success story of the RHI and saved it from been another white elephant for the Government, like the “Green Deal”, but triggers have now been hit and so the wheels must turn to cut the rate by 5%, even though all the other technologies have not yet got off the starting blocks.

Now the question on everyone’s lips is; will it change again in October? We can’t say for certain but think it is likely and, unlike solar PV, you cannot sit on the fence with Biomass as the average time from order to installation of a 100kW biomass boiler is about 6 Weeks.  We do know for sure the rates will reduce over time so if you are thinking about installing biomass, the best advice is to not hold on but do it now! We will not see any sudden price drop for the boilers, like we did with solar PV, as the cost is linked more to the price of metal than the manufacturing process. However, once you are signed up your RHI payments are tied to the Retail Price index, so will only go up each year!

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