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Incorporated in 2002 we have become one of the longest established and well respected UK independent businesses energy suppliers.

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2 Feb

How can the renewable heat incentive & biomass help my business?

by denergi admin

 

Hi we have put some useful  information together to help our prospective customers on the Renewable Heat Incentive also known has (RHI).

Who is it for?

This RHI is ideally suited for any business which is a considerable user of oil or mains gas.

What are the benefits?

First of all you will save money by eliminating or reducing your need for gas or oil, both of which are becoming increasingly expensive year-on-year
Secondly, you will be paid up to 8.5p/kWth for the hot water and heat you generate and use yourself. It depends on exactly what systems you use and how large they are as to what
D-ENERGi can offer biomass solutions for the following eligble sizes.

Tariff name Eligible technology Eligible sizes Tariff rate (p/kWh)
Small biomass Solid biomass;
Municipal Solid Waste (incl. CHP) Less then 200 kWth Tier 1: 7.9

Tier 2: 2.0

Medium biomass 200 kWth and above; less than 1000 kWth Tier 1: 4.9

Tier 2: 2.0

Large biomass 1000 kWth and above 1.0
How the tiers work
In each year the Tier 1 tariff is paid until the system has operated up to 15% of the annual rated output (i.e. the equivalent of 1,314 hours at the rated capacity of the installation)
For the rest of the output in the year, the Tier 2 tariff will apply.
This is how the government explained it. It is not clear how this approach will be averaged over the quarterly RHI payments, but the administrator’s guidance notes will presumably cover this.
An example
A biomass boiler rated at 250kWth operates for 7 hours/day in winter and 3 hours/day in summer, i.e. 1,825 hours in total over the year.
This size of boiler is classified as ‘Medium Biomass’.
It therefore receives the Tier 1 tariff of 4.7p per kWh for the first 1,314 hours
and the Tier 2 tariff of 1.9p per kWh for the other 511 hours
• 1314 x 250 x £0.047 = £15,439.50
• + 511 x 250 x £0.019 = £ 2,427.25
Making a total of £17,866.75 per annum (plus inflation adjustment)

How long do the tariffs last?
They are paid for 20 years from the registration date and index-linked for inflation.

Is that long enough to cover the installation costs?
In most cases the simple answer is yes. We estimate that many participants will earn enough money from the tariffs to pay off their installation costs in about seven to nine years. According to the Government, which has set the tariff levels, the average for most systems be a return of around 12% per annum.

Where the money comes from?
It was announced on October 20th 2010, within the Spending Review, that the RHI will be paid for directly by the Treasury.
The Government had originally planned in the initial consultation to levy the money on resellers of heating fuels.

How much is available?
A total of £860m will be available for the period until fiscal year 2014/15. The government is developing cost control mechanisms to ensure that the budget is not overspent.

Please call us to find out more on biomass and the RHI and how it can benefit your business. Please call us on 0800 781 7626.

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