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NEWS

REALISING RHI RETURNS

Tim McLeman, Technical Director at Wood Energy Limited, discusses the challenge of delivering returns across the lifespan of the Renewable Heat Incentive (RHI).

It’s now been over two years since the launch of the non-domestic RHI, however, many customers still remain unaware that RHI tariff returns are tied directly to the installed product by its serial number. This is significant as the warranties on many renewable technologies fall well short of the scheme’s 20 year return period. As a result, if the technology breaks irreparably all future RHI payments are lost.

Reviewing the scheme to date

There is no question that small and medium sized biomass boilers have been the great success story of the non-domestic RHI. Whilst overall uptake in the scheme is lagging behind target[1], installations of biomass boilers below 1MW have far exceeded expectations, making up 93% of the 3,122 accredited RHI installations to January 2014[2].

In December there was further good news for the industry with the government announcing a range of changes to the non-domestic RHI. These changes are aimed at getting the country back on course to meet its legal obligation to deliver 15% of energy demand through renewables by 2020. Large biomass boilers (1MW and above) are one of the technologies to benefit from these new incentives, from April ; the tariff on all large biomass boilers installed after the 21st January 2013 will double to 2p/kWh1.

Based on these new tariffs and information from a range of industry sources, DECC has produced a series of Market Intelligence scenarios for RHI deployment, suggesting over 4,000 biomass boiler installations could be completed in 2015/2016 alone[3]. Whilst these scenarios remain a “best guess” and are subject to a great deal of uncertainty, they still paint an extremely encouraging picture for the biomass industry, particularly with the upcoming launch of the domestic RHI.

Avoiding the pitfalls

The long-term success of the scheme does not simply depend on increasing the number of renewable energy installations completed. With tariff payments tied into quarterly meter readings over 20 years, it is essential that the technologies not only last, but perform to a high standard throughout this period, ensuring a maximum return for the end user.

This is a considerable challenge for many of the technologies covered under RHI and biomass boilers are no exception, with the large majority of units currently on the market warrantied for a period of 5 years at most. It is therefore essential that all installers and suppliers are upfront with customers, explaining the importance of installing top quality biomass boilers and providing clear guidance on the maintenance required to keep them operating efficiently.  This will allow them to make a fully informed decision about the costs and benefits they can expect to gain by taking advantage of RHI.

Several medium and large biomass boilers have been installed in container solutions. These offer several advantages in terms of reduced installation time and space loss within buildings and also make it much simpler for a customer to move the biomass boilers, allowing them to retain RHI even if they switch premises. Careful consideration must be given to ensure that the containers are properly ventilated and that their external appearance will not rapidly deteriorate, causing them to become an eyesore

The future is looking bright, both for biomass boiler suppliers and installers, and the renewables industry as a whole, providing they tackle these issues head on and make sure that customers get the maximum possible return from their investment.

 

For further information please contact:

Tel: 0845 070 7338

Website: www.woodenergy.com

 

 

Since 2001 Wood Energy Limited have completed over 400 biomass boiler installations, including dozens 1MW+ boiler units and their self-contained Green Heat Module carries an industry leading 20 year warranty.