How free biomass boiler deals may lose businesses £23k a year
Posted by Amanda Hobbins on 21 May 2013 at 10:37 am
Companies offering free biomass boilers to replace your oil- or LPG-fired boiler take the Government’s Non-Domestic RHI tariff payments instead of up-front payment for the installation. This is fine if you really can’t afford to buy your biomass boiler yourself, and you’ll still save over £8,000 a year in fuel costs, but you are forfeiting a potential 12% return, or around £23,000 per year (The sums, based on a 199kW biomass boiler, are illustrated in the infographic below).
As with solar panels, the financial earnings from biomass, or pellet boilers, are huge, so if you can pay for your boiler yourself you should do so. If you can’t afford the upfront cost of a biomass installation, there are other options.
What is the Non-Domestic RHI?
The Government’s Non-Domestic Renewable Heat Incentive scheme is designed to pay out 20 years of cash rewards for installing renewable heat measures. Using a typical 199kW biomass boiler as an example, you would receive £23,000 a year. for 20 years, and you would save around £8,700 a year on fuel costs if you were switching to biomass from oil.
What are the options for funding a biomass boiler installation?
There are three ways to fund your biomass boiler:
1. Pay for the boiler yourself. This is by far the best option if you can afford to as you will receive all the pay-outs from the Renewable Heat Incentive.
2. Lease the boiler using Energy Efficiency Financing. You can lease your new biomass boiler and use your RHI rewards to cover the lease payments.
3. Opt for a free biomass installation where you will benefit from the bill savings BUT you sacrifice the lucrative RHI payments.
What is a Biomass Boiler?
A biomass boiler is a highly efficient boiler that burns wood chips or wood pellets. It can be automatically fed (so you don’t have to keep topping it up) and, in most cases, connects straight to your existing heating system. Although during burning, biomass releases CO2, whilst it is growing it absorbs CO2 - making biomass a carbon-neutral fuel.
Biomass boilers are particularly suitable for rural properties running LPG or oil-fired boilers. The new generation of biomass boilers provides a brilliant alternative and can directly replace your current boiler, using wood pellets or chippings as the fuel source for either space or water heating.
Why wouldn’t a free biomass boiler be the best option?
It may be the best option for you if you are genuinely unable to lease or raise the capital to fund your new biomass boiler installation. Explore all possible avenues for self-funding or leasing your boiler as the financial rewards are high - companies offering free installations will be making huge profits from pocketing the Renewable Heat Incentive returns.
More information on biomass from YouGen
About the author: Amanda Hobbins is Marketing Director at EnergyMyWay
If you have a question about anything in the above blog, please ask it in the comments section below.
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