Latest biomass RHI tariff announcements

Friday 29th June saw DECC announce further tariff degressions for both domestic and non-domestic small biomass under their respective Renewable Heat Incentive schemes. Does this latest drop sound the death knell for biomass?

The latest drop in biomass tariffs was widely expected, but disappointingly large, and may act as a deterrrent to domestic and commercial customers considering this technology.

From 1st July, domestic RHI for biomass will be 7.14p/kW hour, down from 8.93p - a drop of 20%.

For non-domestic small biomass (that is installations <200kW) the tariff will be 4.4p/kW hour, down from 5.87p/kW hour - a drop of 25%.

Biomass pellets

It's been reported in the press that this drop is due not to performance in the last quarter, that is April - June, but a bumper month for biomass uptake in March, ahead of the last degression. Evidence that biomass has been victim of its own success.

It's easy to see the appeal of this particular renewable heating technology, as it's the easiest to retro-fit to an existing heating system and, as it's a high temperature system, will work with your existing radiators and achieve the same radiator temperatures as with a fossil fuel system. Two of the most popular alternatives, ground source and air source heat pumps, are what are termed low temperature systems, and require high insulation standards and larger heat emitters - ideally underfloor heating.  Not surprising then, that biomass appeals to customers with perhaps less well insulated properties, and we have many of those here in The Dales. 

We have certainly seen a drop in biomass enquiries at Yorkshire Heat Pumps as the continuing degression of tariffs sees payback periods lengthen, and in many cases, RHI payments unlikely to cover the cost of installation. 

It's not all doom and gloom though, and we do see biomass continuing to play its part in the renewables mix. In those cases where other technologies are simply not practical, there is still appeal in biomass due to the long-term cost efficiency of the system, making operating cost savings over the life of the system, not just the 7 or 20 years of RHI payments.

If you'd like to know if biomass might be right for you, or understand more about the suitability of the alternative renewable heating technologies for your home or business, why not give us a call on 0845 0506539 or call in at our Blubberhouses showroom for a chat.

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