Degression — Tariff Change Notice published by DECC

Well, degression is here — the tariff for small biomass is being reduced by 5% on the first of July 2014. The DECC notice can be found here.

Tier 1 will be reduced from 8.8p/Kwh to 8.4p/Kwh

Tier 2 will be reduced from 2.3p/Kwh to 2.2p/Kwh

Uptake of small biomass has been far higher than the government anticipated 178% higher, in fact. If the rate of uptake continues to grow, and it will, because investment companies are waking-up to the potential and funding very big projects, then the future rate cut is likely to be 20%. It could be cut by 20% in September this year.

Here is a quote from THIS DOCUMENT on the degression mechanism:

388. Once accredited into the scheme the tariff for an installation cannot be reduced.
Therefore when a degression occurs, reduced tariffs apply only to new applicants to the
scheme. If tariff triggers are reached, tariffs are reduced by 5% initially, with reductions of
up to 20% possible if the rate of uptake does not slow down and continues to increase.
This approach of starting with a relatively small reduction and then, if needed, increasing
the levels of reduction over time is designed to ensure that the market is not negatively
impacted by over correction of tariff levels.

So the message is: If you’re still procrastinating — hurry up and get on with it or you will get left behind.