The Renewable Heat Initiative was established in 2011 to reduce the UK’s dependence on fossil fuels and decrease our carbon footprint. As with the Feed in Tariff for Solar Panels, it is designed to encourage business growth in the renewable sector, many would say it is working well.
In concept you measure heat used, for ‘eligible purposes’ from renewable sources and receive an income based on a pence per kWh (kilowatt hour) paid on a quarterly basis for 20 years, and RPI linked. The RHI was designed to give a system pay back of between 4 – 7 years – a respectable investment by any standards.
Different tariff levels are available for different sized systems alongside a tiered (based on heat used) payment structure. Over the years, the tariffs have dropped in line with the number of units commissioned on each tariff level.
The rates for biomass heating are:
Rates correct up to 31st June 2015
Tariff levels are regularly reviewed by OFGEM and reductions announced as they see fit.
The following calculations give a basic understanding of how the figures work, for reference only. We use independent consultants who can compute the likely RHI income, potential income from tenants and then offset this against predicted installation costs, quantity and cost of fuel required to give you an accurate payback period.
Take the rated size of the boiler (eg. 600 kw) and multiply it by 1,314 hrs, which represents an average amount of heat in kWh it will produce per year.
600kW x 1,314 hrs = 788,400 kWh per annum.
For perspective a 100 W light bulb run for 10 hours will use 1 kWh of energy.
The traditional style 3 bar electric fire is rated at 3 kW, running this for 10 hrs will produce 30 kWh of heat.
Up to 788,400 kWh, Tier 1 is paid out @ 5.18 p/kWh giving an income of £40,839.12 per year. Any heat used above this figure will be paid out @ 1.56 pence / kWh. Crucially the RHI is not a grant; if you use no heat then no RHI income will be generated.
Regulation changes have included new flue gas emissions standards which all boilers have to pass. This has forced many manufacturers to re design their equipment to receive a test pass in order to be eligible for their products to recieve RHI income. As straw is harder to pass than wood, few have obtained the certificates needed to cover all types of straw.
Our range of boilers have been tested on multiple fuel types and passed on all levels several years ago.
StrawBurners.co.uk is a trading name of PedigreeProperties.co.uk, proudly offering the same ethics and approach to clients that has kept Pedigree Properties at the top of their field for many years.