RZ Farm Energy
New Member
- Location
- Somerset
There seems to be a bit of confusion about the RHI budget as mentioned in the Spending Review on Wedesday. Is it increasing to £1.15bn? What's the £700m cut about? To hopefully help clarify matters (and there should be more clarity from DECC today), we thought we'd start a string with our view. We don't profess to have all the answers so please feel free to comment if you think we've got it wrong!
Our take is the budget is indeed forecast for an increase in subsidy (year on year), which sounds nice, but it is in fact a decrease to the previously forecast expenditure. Given that some had feared for RHI's future beyond March 2016, this is good news for those in the sector, but not as wonderful as an 'increase to £1.15bn' might sound.
More detail to come out today from DECC as to how exactly how they're plannng to trim £700m off the RHI budget by 2020/21 (and maybe any tariff changes to take effect in Jan 2016 too), but here's our understanding of the revised forecast:
The fact that the Treasury is accounting for an increased subsidy over the next few years relects an expected increase in deployment (unless they reckon on closing the scheme and that existing installations are somehow going to whack up their output, which seems unlikely). The rate of increase is flatter, which we think indicates an intention for sharper tariff degressions and/or tighter policing.
More to follow...
Our take is the budget is indeed forecast for an increase in subsidy (year on year), which sounds nice, but it is in fact a decrease to the previously forecast expenditure. Given that some had feared for RHI's future beyond March 2016, this is good news for those in the sector, but not as wonderful as an 'increase to £1.15bn' might sound.
More detail to come out today from DECC as to how exactly how they're plannng to trim £700m off the RHI budget by 2020/21 (and maybe any tariff changes to take effect in Jan 2016 too), but here's our understanding of the revised forecast:
The fact that the Treasury is accounting for an increased subsidy over the next few years relects an expected increase in deployment (unless they reckon on closing the scheme and that existing installations are somehow going to whack up their output, which seems unlikely). The rate of increase is flatter, which we think indicates an intention for sharper tariff degressions and/or tighter policing.
More to follow...