Tariff degression

Tariffs may be lower for people who start later in the scheme

Once a system has been installed and registered for the Feed-In Tariffs, the tariff levels are fixed and subject only to index-linking for inflation as described in our information on duration and variations.

What is degression?

Some technologies are expected to get cheaper as volumes build in the future, so the Government has decided to adjust some tariff levels for systems installed in future years. This principle has been established for the Feed-In Tariffs, where the degression levels have been published annually to 2020 as detailed here.

How does it apply to the RHI?

The government wants to adopt a different approach for the RHI, which isn’t preset by date, but is triggered by deployment levels.

The proposed approach was set out in the government’s February 2013 response to the July 2012 consultation. The main aspects are:

There will be a degression trigger for each tariff band and for the RHI as a whole
The trigger for degression in each tariff band will be set at 150% of the expected levels for that technologies (or at 5% of the trigger for the RHI as a wholefor low deployment technologies)
There will be no degression for any tariffs if overall spend is less than 50% of the total RHI trigger
Once an individual tariff trigger is hit, the tariff will be reduced by 5%, with provision for subsequent reductions of 10 and 20% if expenditure levels are not falling back after the initial reduction
If the trigger for the RHI as a whole is hit, all tariffs will be reduced by 5%
Assessments of whether triggers have been hit will be made quarterly, with one month notice given of any changes
DECC plans for these provisions to come into force from 1st June 2013