Automatic cuts, similar to that used for the Feed-in Tariff (FIT) scheme, will be introduced to the Renewable Heat Incentive (RHI) programme under plans proposed by the government today.

The Department of Energy and Climate Change (Decc) has published its response to the non-domestic RHI consultation and intends to introduce a “degression mechanism” to ensure the scheme is financially sustainable.

RHI payments will fall by 5 per cent to new applicants if the number of installations exceeds the government’s target by 50 per cent.

Decc also plans to introduce sustainability requirements for biomass installations using solid fuel.

They will be required to demonstrate that their biomass meets a greenhouse gas lifecycle emissions limit target to ensure they remain eligible for the RHI from April 2014.

Energy and Climate Change minister, Greg Barker, said: “I am fully committed to ensuring our RHI helps as many organisations as possible get on board with a range of exciting sources of renewable heat, and at the same time stays within its means.”

Barker added: “This is however just the first step on our journey to safeguard longevity, provide certainty to industry and sustain growth under the scheme.”