Category Archives: Renewable Heat Incentive

The greenest budget ever


Posted by admin

Listening to the “emergency” budget today was fairly tedious. We were waiting for mention of some forward thinking on carbon reduction, energy, renewables, perhaps the greenest budget ever. We heard nothing. The Renewable Heat Incentive funding is set to close to new applications in April of 2016, and we, like most people in the industry, would like to know the governments thinking moving forward.

Amongst the welfare cuts, increase in the minimum wage, freezing fuel duty at the pump, the Chancellor has produced a package of measures worth £1.3bn to support the North Sea Oil based companies and help to expand production. He has removed the Climate Change Levy exemption on renewable energy produced electricity and confirmed the ending of subsidies for on shore wind. He channeling all vehicle excise duty into the building of new roads, perhaps this will help reduce miles travelled.

This does seem to be at odds with the Climate Change Comittee report that was published at the end of June 2015. This clearly states that whilst the delivery of bioenergy seems to be delivering to target, with the halt in funding the industry needs to “urgently” know what comes next. The Renewable Heat Incentive has not delivered the amount of heat pump installations as expected. The committee recommended in their 2014 report that the awareness of the RHI needs to be improved (at 21%) and this needs to be complimented with additional training as support for installers.

On the face of things there has been an unprecidented 8% fall in carbon emissions in the last year. They can largely be counted for by the following:

  • A very mild winter (and perhaps more mild winters on the way)
  • Closure of coal power production
  • A change in accounting measures
  • A reduction in the public sector estate, with many local councils selling off their building stock (and therefore not heating them.
  • Some good progress in renewable electricity generation

The main issue from the report is that for the targets to be met in the future you can only close so many power stations. There is significant CO2 being produced from heating. Low carbon heat makes up between 1.6 and 2.1% of the heating total in 2014 with an ambition to get to 12% by 2020. Buildings make up 16% of all CO2 emissions. If you add in the falling away of the retrofit of insulation or the lack of input into the development of standards for new homes or new social homes, then this area becomes a budget that may not be reached.

The Telegraph suggested that the Chancellor would review the Levy Control Framework this morning, as this was spiralling out of control. There was no mention of this in his speech. This money, raised through taxes on energy bills to pay for renewable energy (all electricity) strategies, e.g. FiTs

Looking forward we do know that there are 10 months of support for new renewable heating projects. Financially it makes better sense to install a biomass boiler if your needs are greater e.g. 40kW domestically or more than 100kW non domestically. If you would like advice on what to install, what it costs, what incentive you may achieve then get in touch with us through the “contact us” form or phone 01225 580 401


Biomass degressions June 2015


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The biomass degressions for both the non domestic and domestic Renewable Heat Incentive were announced at the start of June to come into force on the 1 July.

What has happened in June?

The first week of June was possibly our busiest ever week for selling wood pellet boilers to installers in Wales, Scotland and the North of England. This was mainly for the installer to be able to get the boiler in time to install it before the rate changes on 1 July.

Roger and Steve went out to Bulgaria early in June for annual training and an update on the NES product range. There will be some new log gasification boilers being added to the Pyroburn range as MCS accredited boilers. These will be affordable and without a Lambda sensor. 18, 25, 30 and 40kW.

There are many other upgrades, and we will release details when they become live.

Once back in the UK we attended the Eco Technology Show in Brighton. This was located at the Amex Stadium, home of Brighton and Hove Albion.

We exibited a 40kW wood pellet boiler (Pelleburn) with a 1500l thermal store. Perhaps our 2 best selling items. Fantasic weather over the week, finishing with a thunder storm on the way home.

At the show there were many interesting talks, and the panel discussion around meeting the 2020 targets for emissions reduction was the best attended. Caroline Lucas chaired the panel. One part of the discussion was that the RHI funding is to finish in 2017, and the total installations to date do not help the UK reach the targets for renewable heating without more funding. There is a new energy minister, Amber Rudd, who is yet to comment on the RHI, we will have to wait and see.

We were also near to the Center of Alternative Energy Stand. They have produced a document “Zero Carbon Britain, rethinking the future”, which I am busy reading at the moment. They do emphasise the need to improve the thermal quality of buildings and also point out that there are limits to “growing” biomass as there are competing demands for land. (Personally I do think that there can be better woodland management and co-ordination on a local scale to produce chip, pellet and log products. I also think that there will be substitute materials for biomass that can also be fuels. e.g. waste from anearobic digestion, recycled coffee granuals, straw, etc, all of which there is work towards meeting a standard at the moment). However the point is clear – if we want to reduce CO2 and CO emissions for heat then we are about 20% of the way there at the moment and 5 years to go.

After Brighton I went up to Scotland – firstly surveying a possible 160kW installation in Dumfries and Galloway with DMS Energy, after which of to Oban and Ferguson Energy, where I looked at a number of installations that had been running for some time, including the Bunkhouse on the Isle of Mull.

What struck me was, despite the rain, the area was beautiful and ideal for biomass. For homes the Pyroburn (log boiler), works very well as fuel can be plentiful.

What is the best way to get from Oban to Aboyne (near Aberdeen)? Up, underneath or through the Cairngorms? I went under and found the road shut (big detour), then on my return I went through and found the road shut (another detour), so perhaps the best route is above! I did, however, find Sugplumb Ltd very accomodating. They are also fitting a lot of renewables at the moment. I did notice the trees during my scenic drive!

After a brief pitstop in Blackford I went down to Oiline Ltd near to Colne, Skipton and Keithley. They have been installing mainly pellet boilers into an area that seems to be more rural than the Cairngorms. Certainly the roads are no better!

There do seem to be fewer trees in this part of North Yorkshire, however I do know that Oil Line are completing a Pyroburn log gasification boiler at the time of writing.

What remains of June for many is getting the RHI applications in before the deadline. We will be making further visits out to see boilers in early July.


Wood Pellet boilers – how much will I be paid?


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If you have a wood pellet boiler then one of the key considerations is understanding whether it will leave you better off.

1 – if you have a recent EPC or Green Deal Assessment there will be two figures on the last page (p 4 of 4) that show you how much space heating, and how much hot water you require in kWhrs. For instance this could be 33,000 hrs and 2500 hours.

2 – If you require to update loft insulation or cavity wall insulation there will also be an estimate on how much this will save you in heating hours.

 

epcdata

 

You now have the information to use the governments Domestic RHI calculator. The advantage of this is that they do keep all the tariffs up to date, so you will know what you will get, providing you install before a certain date.

Once you have figure for what you will get there are key considerations that you can estimate yourself:

What size boiler do I need?

The first thing to do is to roughly calculate what size boiler you need. For instance if your home requires 32000 kWhrs a year of heat then you need to estimate how many hours the boiler will be used for over 1 year.

Estimate 1 – The RHI commercial figure is 1314 hours a year

Estimate 2 – The Energy Savings Trust figure is 1100 hours per year

In reality the figure can vary according to house type – if you have a lot of heat loss e.g. stone walls, then you may need more boiler hours because you are losing lots of heat. If you have a very well insulated home then the home will conserve heat. This is important when it is very cold and determines whether your boiler can keep up with your home’s need.

So – 32000 hours = 24kW boiler using the first estimate or 29kW using the second

If you have secondary heating e.g. a log stove then you may feel that you could use a smaller boiler. If you have poor insulation and no extra heating then you may want a larger one.

If we are invited to do a survey then we have to calculate the size of the boiler, and we do not rely on the EPC figure. However this estimate gives you a starting point.

Once you have got a boiler size it is possible to get a ball park figure for a boiler room installation e.g. no changes to the central heating system, just the replacement cost of the boiler subject to survey.

If you would like us to give you a figure, then please contact us. We do find that our prices are quite reasonable.


£25m Central Heating Fund


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A £25m Central Heating Fund can be accessed by local authorities to help those in fuel poverty.

Those in rural areas will be favourably weighted, and the funds are to target those homes without mains gas or current central heating systems.

The solution may contain:

  • renewable heating options – biomass boilers, air source heat pumps, ground source heat pumps (eligible under the Domestic Renewable Heat Incentive) and heat networks.
  • Oil fired
  • Gas Fired

The technology must be installed alongside a heating system including:

  • Eligible heat exchanger
  • Distribution pipework
  • Heat emitters (e.g. radiators)
  • Heating controls
  • Circulation pump
  • Expansion vessel
  • Air supply and exhaust

The funding can be blended with the Renewable Heat Incentive, and may well target social housing tenants, those identified as “affordable warmth” or low income.

This is a good opportunity for those without central heating systems to benefit from one. Clearly the Renewable Heat Incentive may help further.

For more information please see

 


Budget 2015


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In the budget 2015 there was very little about the UK progress towards its carbon targets for 2020. DECC (Government Department for Environment and Climate Change) had its annual review at the turn of the year. At this point Ed Davey admitted that progress towards the Renewable Heat target is not doing as well as expected and “they” (who ever gets in in the next general election), will have to do better.

The RHI was delayed in coming out, however in the first year of the Domestic Renewable Incentive there has been reviews and tariff reductions. The next one taking place on the 1 April where the tariff will drop to 8.93p per kWh. The Non Domestic Renewable Heat Incentive for small biomass will also fall to 5.87p per kwh. Other technologies remain the same, apart from Anaerobic Degestion. In some respects this is positive news. The uptake of biomass is on the increase, but “not enough”. The reduction in tariff means that companies will have to review where they are targetting potential installations.

If your a dometic home owner and use 15000 kWhs per annum the domestic RHI is now worth £9376 in payments over 7 years. To install a domestic wood pellet boiler within this budget is possible, but many companies who install Austrian or German boilers will find this difficult. This may be for a 3 bedroom detached, but well insulated home. If you need 55000 kWhrs and require a 40kW boiler you will receive £34,380. This is a far more achievable budget for a much larger home. It may be that this home owner (large home with more than 6 bedrooms) finds the Domestic Renewable Heat Incentive much more attractive. They may be able to afford a larger hopper for automatic fuel distribution and get an attractive return for the amount that they have invested. This quick analysis suggests that the very large home owner will benefit significantly more from the Domestic RHI.

With regard to the Non Domestic Renewable Heat Incentive the new tariff means a maximum return of £306,984 over 20 years for a 199kW biomass boiler installation. Many businesses require a 5 year payback as part of their procedures. This suggests that the system cost is a maximum of £76,000. Again this is more difficult to do with more expensive boilers.

Part of the difficulty for both the home owner and the organisation is the cost of fuel. Oil is currently around 40p per litre and in the short term this price will not change (with OPEC prices staying low for perhaps the next 3 years). The latest Energy Savings Trust figures from Feb 2015 suggest that fuel prices are very similar between oil, gas and wood pellets. LPG and Electricity are much more expensive.

Fuel prices Gas Oil  LPG Wood pellet
Average price (pence/kWh) 4.29 5.36 8.32 4.77
Standing charge (£/year) £87.92

There are arguments and counter arguments over what will happen to the prices of each fuel over the next 7 years (domestic) or 20 years (Non domestic). What is true is that the pellet market has more room for new suppliers or substitute products. For instance it is possible to make pellets out of straw, AD husks, biocoal, none of which are approved by the RHI just yet, but they may well be introduced over the next few years. This potentially keeps prices low.

There is an issue with electricity prices over the next 5 years or so. The UK has a legally binding 2020 CO2 target. 2/5 of our CO2 emissions come from coal power stations which are due to close down. In the last 5 years of this government it is not clear whether there has been much progress made on Nuclear Power. Austria, and now Luxemburg are objecting to the “subsidy” beig offered to EDF to build the plant at Hinkley. This may well delay further the construction for possibly another decade. We are facing a shortage of electricity. Choosing electricity for heating only adds to the issues that the grid already faces.

In summary – the fuel market is confusing as it is not behaving according to its supposed long term trend. The governemnt is aware that renewable heat can help meet the CO2 targets for 2020, but the RHI scheme has reduced its tariffs and this will impact on a number of sectors of the renewables industry and hamper the growth that the UK needs.

Wood Pellet Solutions is a division of Renewable Living and imports wood pellet and log boilers for the UK domestic and commercial market. To enquire how to make the most of your opportunity to move away from fossil fuels please contact us on our contact page, or phone 01225 580 401.


Degression for the RHI Tariff for domestic biomass


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Domestic Renewable Heat Incentive applications are monitored closely. When targets are exceeded this triggers a degression or reduction in the tariff.

Applications for domestic biomass installations for the domestic Renewable Heat Incentive have exceeded targets and from the 1 April 2015 there will be a 20% degression from 10.98 to 8.93p.

This degression will affect all new installations where the installation has not been completed and claimed for.

If you are in any doubt about your application you should have:

1 – A Green Deal Assessment

2 – An MCS certificate that covers the installation of an MCS accredited boiler by an MCS accredited company

For legacy applications before 9 April 2014 the tariff is still at 12.2p for biomass installations. You must, however, apply before 8 April. For instance you may have been waiting to take action on your insulation.

Rates for other technologies such as heat pumps and solar thermal have remained unaffected – and even risen slightly as they have been adjusted for inflation.

These are now:

Applications submitted Biomass boilers and stoves Air source heat pumps Ground source heat pumps Solar thermal
New applications – current and future tariffs
01/01/15 – 31/03/15 10.98p 7.30p 18.80p 19.20p
01/04/15 – 30/06/15* 8.93p 7.42p 19.10p 19.51p

What is the Renewable Heating Incentive (RHI)?


Posted by Biomass Guy

What Exactly is the Renewable Heating Incentive?

Exciting News!

Offgem recently published an article on their webite (www.ofgem.gov.uk) that all over England, Scotland, and Wales we hit a major milestone on 29/09/14: 10,000 accreditations for the Domestic Renewable Heat Incentive (RHI) in less than six months of the scheme being opened. The facts speak for themselves really, more and more people turn to wanting to use renewable energy. Let me start by explaining about what the Renewable Heat Incentive (RHI) is and how you could benefit from it.

Biomass Renewable Energy Boilers

We have discussed the Renewable Heating Incentive before but the key recent change is that since April 2014 it is possible for domestic users to get paid for using Biomass Renewable Energy. (Previously there was just grants available to part fund the installation of biomass boilers)

The RHI is the worlds’ first long-term government financial support programme for renewable heat. It was first introduced in 2011 to promote the use of renewable heat by paying installation grants to participants of the scheme. Switching to heating systems that use naturally replenished energy can not only help the UK reduce its carbon emissions but also saves money on our heating bills. The Renewable Heat Incentive applies both to heat (from low carbon sources) and to biomethane fed into the gas grid.  In addition, you get continuous payments for the next seven years for using renewable energy. With the rising cost in fuel bills each year it sounds like a no-brainer to me!

The Renewable Heat Incentive has two schemes – Domestic and Non-Domestic and is open to anyone who can meet the joining requirements. It’s for households both off and on the gas grid. People off mains gas have the most potential to save on fuel bills and reduce carbon emissions.

  1. Domestic RHI – launched 9 April 2014 and open to homeowners, private landlords, social landlords and self-builders. The key to joining is that the renewable heating system heats only a single property that can get a domestic Energy Performance Certificate (EPC). The EPC is the proof that your property is assessed as a domestic ‘dwelling’. An EPC gives information about a property’s energy use, plus recommendations on how to reduce energy and save money.
  2. Non-domestic RHI – launched in November 2011 to provide payments to industry, businesses and public sector organizations. Generally, if the renewable heating system is in commercial, public or industrial premises, then you would apply to the Non Domestic RHI. This can include small and large businesses, hospitals, schools, and organisations with district heating schemes where one heating system serves multiple homes.

Now to the good bit; save money and get paid for using renewable energy! People who join the domestic RHI scheme receive ongoing payments for seven years for the amount of clean, green renewable heat their system produces. The ongoing payments are calculated multiplying a tariff with the heat demand/use in your home. The current tariff rates in pence per kilo watt hour (p/kWh) are as follows (a);

* Biomass – 12.2 p/kWh
* Air Source Heat Pump -7.3 p/kWh
* Ground Source 19.2 p/kWh

Special Note:
The domestic rates are reviewed every quarter. It is already suggested that the domestic RHI for biomass will start to drop by as much as 10 percent by January 2015. (This is similar to what happened with the Feed In Tariff (FIT) for solar pv panels) So clearly acting sooner rather than later to claim the RHI would be advantageous.

It’s easier than most people think to get started with renewable energy in your home or business. At Wood Pellet Solutions we can assist you with choosing the right energy options allowing you to maximise your financial return from the RHI. Contact Us for further information.

Contact Us Today for further information or quotation or Phone 01225 580401

Notes:
(a) Example of domestic tariff rates taken from the Ofgem Website, www.ofgem.gov.uk


Domestic Renewable Heat Incentive announcement – Wood Pellet Boiler Solutions


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The Renewable Heat Incentive has been announced today (9 April 2014) and is now welcoming applications for suitable installations.

The tariff for the domestic Renewable Heat Incentive has been announced as 12.2p per kw for 7 years

This equates to about £160 per kW per annum.

A 40kW boiler could earn £6400 per annum or £44,600 in total over 7 years.

For instance there is a need for a Green Deal Assessor to visit each home, and this is to check insulation in the loft and in the walls where applicable. The EPC that they undertake will be the basis for the award of the incentive. E.g. if they say you need 30,000 kWhs of heat per annum then you will be paid 12.2p X 30,000 per annum = £3660 per annum or £25,620 in total over 7 years.

How does this work for a typical installation?

For smaller boilers between 10 and 15kW we offer a choice of boilers from MCZ such as the Musa, or Extraflame such as the LP14 or a Sunsystem Pelleburn 15kW.

Wood Pellet Boiler

Pelleburn 15kW

 

Extraflame LP14

MCZ Musa

Boilers of this sort are available for between £3000 and £4000 depending on model. Total installation prices vary according to what is possible and what you want – however consider the following:

A stainless steel flue

A hot water tank or thermal store

Pellet stores or hoppers

These can all add in extra costs to the end bill. However typical installations are between £8 and £12k in this range. The exact amounts are determined through a survey.

You may typically earn between £3,000 and £5000 from the Renewable Heat Incentive payments for installations between 10 and 15 kW. In addition there are fuel savings. We believe these to be between 20 and 30 percent against an oil boiler of a similar efficiency. At this range of output it may well be £200-300 per annum or a further £1500 to £2000 in total.

A larger installation of £40kW may require more pellet storage, a larger pipe size, a larger buffer store or accumulator tank and will require more space. Typical costs are best discussed with us directly. Boilers of this size may typically earn £44,600 over 7 years.


Holiday Cottage biomass June 2013 offer


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Holiday cottages, bed and breakfasts, small hotels are often run by small companies in the UK. We are making an offer to install a renewable boiler that can earn £80,000 (see below) and give you a top class video that can be used online to promote your business.

The Renewable Heat Incentive provided by the government is a way of investing in your property to reduce heating costs and provide a cash stream.

Suitable boilers are “biomass” which include wood pellet boilers, log or wood boilers, wood gasification boilers or wood chip boilers.

Here is how it could work:

A 50kW boiler could use 65700 kWhs of heat in one year.

The wood pellet cost could easily be less than £3000 per annum

The oil cost (at last years price) would be over £4000 per annum

This would provide a saving of £1000 per annum

The government incentive pays 8.6p per kWh and this could be £5650 per annum for 20 years or £113,000 in total

Typically projects are paid for between years 3 and 5 leaving the owner of the property with over £6000 per annum in extra income per year.

During June we have decided to make this offer even better by offering a video service that can be used to promote the quality of your holiday let, bed and breakfast or small hotel online. The video would be 3 minutes long  and would normally be worth at least £1000.

For an example of the video please see http://www.highlightmedia.tv/hidelow-house-cottages .

Why are we doing this?

Highlight Media are well known for producing videos for the UK holiday rental market and they have evidence that videos drive more customers to internet sites and help customers confirm their holiday destination.

Renewable Living Ltd has a long association with Highlight Media and it seems a sensible way for us to help customers both reduce their costs and improve revenue.

If you are interested please use the contact form on the side of the page or phone 01225 580 401.

This offer is open for any company confirming an order during June within our 90 mile radius of our base near Devizes. This would inlcude:

Worcestershire, Gloucestershire, Wiltshire, Bristol, Avon, Bath and North East Somerset, West Berkshire, Hampshire, Dorset and parts of Devon and Oxfordshire.

We are focusing on rural properties as these tend to have the available space for a biomass boiler and have room for deliveries. The incentive to get off LPG or oil is also high.

If you are interested please use the contact form on the side of the page or phone 01225 580 401. 


Renewable Heat Premium Payment update


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Key changes have been made to the householder stream of the Renewable Heat Premium Payment (RHPP) announced by the Department of Energy and Climate Change on 20 May 2013.

For biomass boilers (Wood pellet boilers, log boilers or gasification boilers) the payment has been increased from £950 to £2000 per installation.

The government is asking for each new installation to undertake a Green Deal Assessment as part of the package.

The RHPP only applies to installations where there is no current or removed gas central heating. The only exception is solar thermal where the amount for each new installation is now £600.

Wood pellet solutions (Renewable Living Ltd) has a range of biomass boilers and is MCS accredited for both biomass and solar thermal. If you would like any further details then please get in touch using the form on the right.